Technology Stocks : Facebook, Inc.
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To: Glenn Petersen who wrote (2728)7/27/2017 10:05:37 AM
From: The Ox5 Recommendations

Recommended By
Glenn Petersen
J.F. Sebastian
Kirk ©

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Taking a look at the past 4 quarters, EPS estimates were beaten 3 times and missed once. The average of the actual EPS for the 4 quarters was up 9% over the estimates. YOY EPS growth for the past 4 quarters vs previous 4 was over 40%.

Looking at 2017 year end, we see estimates around $4.90/share. If we use a 35 PE (not all that generous since they've been growing at a rate over 40%) and then add in cash we get a price target of 4.90x35+$12cash = target of $183/share.

If we add 5% to 2018 EPS estimates of $6.08 based on the assumption that FB will continue to beat the street on a slightly below the past average we get a 2018 EPS estimate of $6.39/share. Using a PE range of 25 to 40, bearish on the low end and uber bullish on the high end, we get a price target range of $170 to 267 (adding in $12 for cash, which is also a conservative figure for year end 2018).

Middle our 2 price targets and we have a $220/share price target for 18 month out. Based on a rounded current price of $178, $42 gain would be 24% upside from here.

I'm not expecting anyone to agree with these "gaming the numbers" scenarios but thought I'd add them to the thread for both "food for thought" and for hindsight consideration a year from now.
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