Facebook (FB) is the largest social network on the planet. The company is valued at $690 billion and is growing rapidly. Revenues are increasing by almost 18% YoY which is now at $71 billion annually. The company is one of the few companies that is able to grow revenue rapidly as it scales.
The company engages in the development of social media applications for people to connect through mobile devices, personal computers, and other surfaces. It enables users to share opinions, ideas, photos, videos, and other activities online.
The firm's products include Facebook, Instagram, Messenger, WhatsApp, and Oculus. The company was founded by Mark Zuckerberg, Dustin Moskovitz, Chris R. Hughes, Andrew McCollum, and Eduardo P. Saverin on February 4, 2004 and is headquartered in Menlo Park, CA.
The stock is up big over the last 5 years as you can see in the stock chart below.
Facebook tracks daily active users which are now approaching 2 billion people a day!
At EEON, we spend a lot of time figuring out how to analyze companies to make it easy for you to make better investment decisions. Our rating system helps you understand any company based on 6 important investment factors. The goal is to show you how a company ranks relative to all other companies in the market.
This article will analyze Facebook but will also explain how the rating system works so that you can use it to analyze any company.
First let's look at the top row above, there are 3 different factors which all pertain to growth and momentum. As an example, the growth rating for Facebook is 80. Facebook is growing faster than 80% of the companies in the market. The results are impressive given the size of the company. It gets an 82 for momentum which factors in RSI and 3 & 6 month performance. Facebook has more momentum than 82% of the companies in the market. To round things out, Facebook gets a 96 for scalability which factors in revenue growth + profit margins. This metric is used by private equity firms to value high growth companies but we apply it to all companies. All of these metrics are near the top percentiles of the market. This makes sense given Facebook's rapid growth and massive audience.
The bottom row of EEON scores focus on value related metrics. We have value, profitability and safety. You can see that Facebook gets an 18 for value which means that 82% of companies are cheaper. The value score looks at the price to sales ratio, price to book, dividend yield and earning yield. It is very common to see companies with a top row in the green and more red on the bottom. This is logical given that higher growth companies tend to be more expensive as the market tries to price in that growth into the future. We won't go into each factor here but you should have the idea.
We also rank all companies based on these factors. Facebook shows up a the top on several of these.
Facebook ranks as:
#87 of most profitable securities
#58 of most scalable
#61 of lowest risk
Ratings vs Stats
You can use the EEON rating system to find great stocks and to quickly analyze a company to understand how it ranks relative to all companies in the market. The old way of researching stocks involved looking at tons of metrics like the table below (we provide all of the relevant metrics but using the EEON stock ratings helps to give more context).
As you can see, EEON stock ratings are a powerful way to analyze any company. We run analytics continuously to find outliers, abnormal activity and to show relative ranks based on key factors. Our goal is to show you how Facebook (or any company) stacks up relative to other investment options. We'll keep analyzing individual companies as we work to educate our community on how to leverage EEON to make better investment decisions.