Facebook Inc. (FB) operates a social networking website worldwide. The Company's products for users are free of charge and available on the Web, mobile Web, and mobile platforms, such as Android and iOS. Its website enables users to connect, share, discover, and communicate with each other. The Facebook Platform is a set of tools and application programming interfaces that developers can use to build social apps on Facebook or to integrate their Websites with Facebook. It offers products that enable advertisers and marketers to engage with its users. Facebook Inc. is headquartered in Menlo Park, California.

More bad news for Facebook surfaced late last week as the company announced a data breach where hackers compromised the personal data of @50 million users--Facebook knows 50 million were directly affected, and noted that up to 40 million more "could have been."

This is another example of a long series of data-security issues which include: the fact that Facebook data was used to target potential voters as part of the nefarious Russian activities during the 2016 US presidential election cycle, Cambridge Analytica improperly shared user data without permission, and--back in June, the company had a bug where user posts were accidentally publicly available despite security settings.

However, this breach is much more serious than we saw with Cambridge Analytica-- and its improper collecting/sharing of data. Here, the hack could be used to takeover customer accounts and hackers could see everything in the user's profile. And, if that's not bad enough, Facebook also announced later last week that with the hacked data, the data thieves could also potentially access third-party sites that users had logged into via Facebook.

This is a serious problem for the company. While it may skate by in the US due to a more "permissive" regulatory climate, European regulators may be less inclined to cut the company a break. According to some analysts, Facebook could face fines in excess of $1.5 BILLION in Europe due to its lax handling of user data for some 5 million users on that continent. And, if US regulators do want to get tough, they have many avenues with which to pursue the firm. Currently, both the FTC and the SEC have ongoing investigations into Facebook's privacy protections and its data-sharing practices.

VALUENGINE RECOMMENDATION: ValuEngine continues its HOLD recommendation on FACEBOOK INC-A for 2018-09-28. Based on the information we have gathered and our resulting research, we feel that FACEBOOK INC-A has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE Company Size but UNATTRACTIVE Price Sales Ratio.

 

Valuation & Rankings
Valuation	8.80% undervalued	Valuation Rank(?)	67
1-M Forecast Return	-0.35%	1-M Forecast Return Rank	24
12-M Return	-2.53%	Momentum Rank(?)	39
Sharpe Ratio	1.27	Sharpe Ratio Rank(?)	96
5-Y Avg Annual Return	28.96%	5-Y Avg Annual Rtn Rank	95
Volatility	22.74%	Volatility Rank(?)	62
Expected EPS Growth	6.11%	EPS Growth Rank(?)	29
Market Cap (billions)	459.99	Size Rank	100
Trailing P/E Ratio	23.01	Trailing P/E Rank(?)	53
Forward P/E Ratio	21.69	Forward P/E Ratio Rank	27
PEG Ratio	3.77	PEG Ratio Rank	10
Price/Sales	9.49	Price/Sales Rank(?)	13
Market/Book	7.73	Market/Book Rank(?)	20
Beta	0.47	Beta Rank	61
Alpha	-0.05	Alpha Rank	49