In the wake of a major privacy scandal, Facebook Inc. (FB, Financial) is preparing to launch a new set of privacy shortcuts and tools that it says will help users better protect their personal information.
Users will be able to access some of these tools via a menu called 'privacy shortcut,' which will allow them to gain easy access to privacy settings. Currently, the privacy settings are spread across nearly 20 different screens. Another tool will allow users to access and manage information, such as posts, reactions, comments and searches.
In addition, Facebook users will also be able to permanently delete material from the platform's servers and be more selective about downloads of posts, photos and likes.
It's all part of an effort to win back the public's trust. In the words of its top privacy officials and deputy general counsel: “Last week showed how much more work we need to do to enforce our policies and help people understand how Facebook works and the choices they have over their data. We’ve heard loud and clear that privacy settings and other important tools are too hard to find and that we must do more to keep people informed.”
The social media giant is trying to fend off pressures after a data breach scandal that targeted the personal data of 50 million of its users. The social media giant has banned Cambridge Analytica, the British political consulting firm involved in the breach, from advertising on its site.
Facebook lost $32 per share or nearly 17.5% on the Nasdaq. The social network is currently trading profoundly underneath the 200, 100 and 50-SMA lines. Before the negative surprise of March 17, the stock was up nearly 32% over the trailing 12 months outperforming the Nasdaq by 7.4%.
For the 52-weeks through March 28, Facebook’s gain has been trimmed to 7.3% versus a Nasdaq gain of 17.83%.
The share price of $153.03 is back to July valuations and $42.29 per share off the 52-week high of $195.32. The current market value is a bit more than 10% over the 52-week low of $138.81 per share.
The stock is much cheaper now and offers a more convenient entry point. That is also the opinion of Wall Street, where the buying sentiment snatched recommendations from the hold sentiment. As of March 2018, the number of analysts who have suggested buying Facebook has increased compard to a month ago. Nearly 40% of analysts suggested increasing a hold on Facebook. Most analysts still recommend holding shares of the social network. But the 'buy' recommendation must weigh a lot since the rating is on a 1.8 out of 5 and in the 'buy' to 'strong buy' area.
To date, 42 analysts have produced estimates on the share price that Facebook will reach within the next 52 weeks of trading. The estimates range between a low of $131 and a high of $265 per share. The mean of that range is $221.74 and it represents a nearly 45% growth.
If you are considering buying shares of Facebook, you cannot rely solely on what the Wall Street community of analysts believe the security is worth. You must also look for consistencies that can support your investment decision.
You may want to consider that the social network is looking to launch a smart speaker and a video chat system, which will enable users to talk to one other as if they are in the same room. The launch has been postponed after the Facebook Developer Conference, which is scheduled for May 1-2.
However, Facebook is launching new privacy control tools that will be extended globally in upcoming weeks.
Facebook has a market capitalization of $444.55 billion, a price-book ratio of 5.97 times versus an industry median of 3.85, and a price-sales ratio of 11.12 times versus an industry median of 2.60. The price-earnings ratio is 28.39 times while the industry has a median price-earnings ratio of 33.49.
The forward price-earnings ratio is 21.55 times. For full fiscal 2018 and 2019 analysts predict an earnings per share of $7.35 and $8.9. Total revenues are forecasted to grow 35.80% to $55.21 billion in 2018 and 26.90% to $70.9 billion in 2019.
(Disclosure: I have no positions in any security mentioned in this article.)
