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by mckilljoy
5226 days ago
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Facebook's PE ratio is around 100 last time I checked. If a 'good' valuation is in the 10-15 range (e.g. Microsoft, Apple, Google), then either Facebook's profits earned needs to increase by 10x, or it's share price needs to fall by 10x. If Facebook's percentage revenue increase is 'only' double-digits, and shrinking, it will take years and years of earnings growth before it becomes a 'good value'. It will take 5 years at a sustained 60% yearly earnings growth rate to reach the same PE ratio Apple has today. |
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