Facebook Review

Overview of the Facebook company

In the portfolio - 1 share, share ~2.92%, share price at the time of writing this post - $175.07. Total capitalization = $500 billion. Let me remind you that Facebook makes money mainly from the sale of advertising, also owns Instagram and Whats App (yes, big American brother is always looking out for us 😎)

Facebook has strong results in terms of revenue and profit: 2017 - 40.65 billion/15.93 billion; 2018 - 55.84 billion/22.11 billion; 2019 - 70.7 billion/18.49 billion. Profit growth rate over the last 5 years is ~+35% annually.

Current PE=27 is not bad, especially in comparison with the rest of the market, PEG~1.6 is worthy for one of the largest companies by capitalization in the world.

Forecasted growth for the next 3-5 years: revenue +14% annually, net profit +16-17% annually, which gives us an expected doubling of the company's profitability in ~4 years.

An also important point is that Facebook has no debt (a year ago it was zero, now ~277 million) and more than $50 billion in cash in its accounts.

Insiders in Facebook have a significant share of ~17% of the company, of which 13.84% (now almost 400 million) stocks) from the founder - Mark Zuckerberg. On February 16, 2020, insider Michael Schroepfer purchased $400k in stocks.

Conclusion: for me personally, Facebook is currently the most promising company from the TOP by capitalization in the world. You shouldn’t expect explosive growth from it, but I find it much more interesting than (if fans forgive me) Apple, Google, and Microsoft. I think it is optimal to buy stocks at a price below $200 per share. Price forecast for the end of 2022 is ~$300 per share, +70% from the current price and ~+19% per annum in dollars for 3 years. In my portfolio, the share of FB is now modest, only 3%; previously I did not take a position due to the high share price. Target level for the portfolio is ~4-6%, (if all free 💰 s are not used to buy the bottom in sagging issuers 😐)

Graphics:

1) Price dynamics for 5 years
2) Revenue and profit, 2020 and beyond - forecast values
3) Profit for share, 2020 and beyond - forecast values