June 27, 2021

NASDAQ: FB

FACEBOOK INC
BUY HOLD SELL

BUY
RATING SINCE 05/01/2020
A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F TARGET PRICE $450.42

Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 6/24/2021
NA NA 1.30 $822.3 Billion $207.11-$344.90 $343.18

Sector: Information Industry Group: Other Information Services

Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years
FB BUSINESS DESCRIPTION
Facebook, Inc. develops products that enable 500
people to connect and share with friends and 450
family through mobile devices, personal computers, TARGET
TARGET
TARGETPRICE
PRICE
PRICE$450.42
$450.42
$450.42
virtual reality headsets, and in-home devices 400
worldwide.
350
STOCK PERFORMANCE (%) 300
3 Mo. 1 Yr. 3 Yr (Ann)
250
Price Change 21.63 46.65 19.37
200
GROWTH (%)
Last Qtr 12 Mo. 3 Yr CAGR 150
Revenues 47.55 28.68 28.40 100
Net Income 93.73 60.99 23.63 Rating History
EPS 92.98 60.13 24.62 BUY BUY

RETURN ON EQUITY (%) Volume in Millions

200
FB Subsector Avg S&P 500
Q1 2021 25.24 21.96 10.47 100
Q1 2020 19.90 17.03 15.47
0
Q1 2019 22.60 15.26 15.83 2020 2021
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON
RECOMMENDATION
We rate FACEBOOK INC (FB) a BUY. This is based on the convergence of positive investment measures,
which should help this stock outperform the majority of stocks that we rate. The company's strengths can be
seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable
debt levels by most measures, notable return on equity, solid stock price performance and impressive record
of earnings per share growth. Although no company is perfect, currently we do not see any significant
weaknesses which are likely to detract from the generally positive outlook.

29.36 43.30 45.33 HIGHLIGHTS

The revenue growth came in higher than the subsector average of 34.3%. Since the same quarter one year
FB Subsector Avg S&P 500
prior, revenues rose by 47.5%. Growth in the company's revenue appears to have helped boost the earnings
per share.
EPS ANALYSIS¹ ($)
Although FB's debt-to-equity ratio of 0.09 is very low, it is currently higher than that of the subsector average.
Along with this, the company maintains a quick ratio of 5.88, which clearly demonstrates the ability to cover
short-term cash needs.

Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of
Q2 0.91
Q1 0.85

strength within the company. When compared to other companies in the Other Information Services
subsector and the overall market, FACEBOOK INC's return on equity exceeds that of the subsector average
Q3 2.12
Q4 2.56

Q1 1.71
Q2 1.80
Q3 2.71
Q4 3.88

Q1 3.30

and significantly exceeds that of the S&P 500.

2019 2020 2021 Powered by its strong earnings growth of 92.98% and other important driving factors, this stock has surged by
NA = not available NM = not meaningful
46.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the
stock's future course, although almost any stock can fall in a broad market decline, FB should continue to
1 Compustat fiscal year convention is used for all fundamental
data items. move higher despite the fact that it has already enjoyed a very nice gain in the past year.

FACEBOOK INC reported significant earnings per share improvement in the most recent quarter compared to
the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth
over the past two years. We feel that this trend should continue. During the past fiscal year, FACEBOOK INC
increased its bottom line by earning $10.10 versus $6.44 in the prior year. This year, the market expects an
improvement in earnings ($13.10 versus $10.10).

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet nor any other party guarantees its accuracy or Report Date: June 27, 2021 PAGE 1
makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet, Inc. Copyright(c) 2006-2021. All rights reserved.
 June 27, 2021
NASDAQ: FB

FACEBOOK INC
Sector: Information Other Information Services
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 6/24/2021
NA NA 1.30 $822.3 Billion $207.11-$344.90 $343.18

PEER GROUP ANALYSIS SUBSECTOR ANALYSIS

REVENUE GROWTH AND EBITDA MARGIN*
FACEBOOK INC falls within the Information sector and the Other Information Services industry group of the
North American Industry Classification System or NAICS. More precisely, a significant portion of company
60%

PINS
activities involve Internet Publishing and Broadcasting and Web Search Portals.
SNAP
FA
VO

TheStreet Quant Ratings is currently tracking 568 companies in the Information sector that total around
RA
BL

$14,804 billion in market capitalization as well as $2,813 billion in annual sales.

E

The Other Information Services subsector accounts for 19.0% of those revenues.

FB Industries in the Other Information Services subsector group establishments supplying information, storing
Revenue Growth (TTM)

and providing access to information, searching and retrieving information, operating Web sites that use
GOOG search engines to allow for searching information on the Internet, or publishing and/or broadcasting content
BIDU GOOGL exclusively on the Internet. The main components of the subsector are news syndicates, libraries, archives,
UN

YNDX ATHM
FA

exclusive Internet publishing and/or broadcasting, and Web search portals.

VO

TWTR
RA
B
0%

LE

-40% ZG Z 60% PEER GROUP: Other Information Services

EBITDA Margin (TTM) Recent Market Price/ Net Sales Net Income
Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M)
Companies with higher EBITDA margins and
FB FACEBOOK INC 343.18 822,275 29.36 94,399.00 33,741.00
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth SNAP SNAP INC 67.65 85,795 NM 2,813.73 -925.79
rates. Companies for this scatter plot have a market ATHM AUTOHOME INC 62.92 8,013 14.20 1,380.18 531.97
capitalization between $8 Billion and $1.6 Trillion. TWTR TWITTER INC 68.25 54,472 NM 3,944.73 -1,059.23
Companies with NA or NM values do not appear. BIDU BAIDU INC 194.77 54,052 9.17 17,403.00 7,328.51
*EBITDA – Earnings Before Interest, Taxes, Depreciation and PINS PINTEREST INC 76.28 41,746 NM 1,905.95 -8.80
Amortization.
Z ZILLOW GROUP INC 121.18 29,300 757.38 3,432.44 53.12
REVENUE GROWTH AND EARNINGS YIELD ZG ZILLOW GROUP INC 121.87 29,300 761.69 3,432.44 53.12
YNDX YANDEX N.V. 69.64 22,365 126.62 3,251.42 208.98
60%

PINS
GOOGL ALPHABET INC 2,450.00 1,560,548 32.61 196,682.00 51,363.00
SNAP
FA

GOOG ALPHABET INC 2,545.64 1,560,548 33.89 196,682.00 51,363.00

VO
RA

The peer group comparison is based on Major Other Information Services companies of comparable size.
BL
E

FB
Revenue Growth (TTM)

GOOG GOOGL
UN

ATHM
YNDX
FA

TWTR BIDU
VO
RA
B
0%

LE

ZG
-2% Z 12%
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between 0.5% and
57.2%. Companies with NA or NM values do not
appear.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet nor any other party guarantees its accuracy or Report Date: June 27, 2021 PAGE 2
makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet, Inc. Copyright(c) 2006-2021. All rights reserved.
 June 27, 2021
NASDAQ: FB

FACEBOOK INC
Sector: Information Other Information Services
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 6/24/2021
NA NA 1.30 $822.3 Billion $207.11-$344.90 $343.18

COMPANY DESCRIPTION STOCK-AT-A-GLANCE

Facebook, Inc. develops products that enable people to Below is a summary of the major fundamental and technical factors we consider when determining our
connect and share with friends and family through overall recommendation of FB shares. It is provided in order to give you a deeper understanding of our rating
mobile devices, personal computers, virtual reality methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
headsets, and in-home devices worldwide. The important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
company's products include Facebook that enables understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
people to connect, share, discover, and communicate valuation. Please refer to our Valuation section on page 5 for further information.
with each other on mobile devices and personal
computers; Instagram, a community for sharing photos, FACTOR SCORE
videos, and private messages; Messenger, a messaging
application for people to connect with friends, family, Growth out of 5 stars 5.0
groups, and businesses across platforms and devices; Measures the growth of both the company's income statement and weak strong
and WhatsApp, a messaging application that is used by cash flow. On this factor, FB has a growth score better than 90% of the
people and businesses to communicate in a private way. stocks we rate.
It also provides Facebook Reality Labs, an augmented
and virtual reality product that help people feel
connected, anytime, and anywhere. Facebook, Inc. was
Total Return out of 5 stars 5.0
founded in 2004 and is headquartered in Menlo Park, Measures the historical price movement of the stock. The stock weak strong
California. performance of this company has beaten 90% of the companies we
cover.
FACEBOOK INC
1601 Willow Road Efficiency out of 5 stars 5.0
Menlo Park, CA 94025 Measures the strength and historic growth of a company's return on weak strong
USA invested capital. The company has generated more income per dollar of
Phone: 650-543-4800 capital than 90% of the companies we review.
http://investor.fb.com
Employees: 59000
Price volatility out of 5 stars 5.0
Measures the volatility of the company's stock price historically. The weak strong
stock is less volatile than 90% of the stocks we monitor.

Solvency out of 5 stars 5.0

Measures the solvency of the company based on several ratios. The weak strong
company is more solvent than 90% of the companies we analyze.

Income out of 5 stars 0.5

Measures dividend yield and payouts to shareholders. This company weak strong
pays no dividends.

THESTREET QUANT RATINGS RESEARCH METHODOLOGY

TheStreet Quant Ratings' stock model projects a stock's total return potential over a 12-month period
including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these
stocks to perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.

Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet nor any other party guarantees its accuracy or Report Date: June 27, 2021 PAGE 3
makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet, Inc. Copyright(c) 2006-2021. All rights reserved.
 June 27, 2021
NASDAQ: FB

FACEBOOK INC
Sector: Information Other Information Services
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 6/24/2021
NA NA 1.30 $822.3 Billion $207.11-$344.90 $343.18

Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

IBES consensus estimates are provided by Thomson Financial
FACEBOOK INC's gross profit margin for the first quarter of its fiscal year 2021 is essentially unchanged when
compared to the same period a year ago. The company grew its sales and net income significantly quarter
versus same quarter a year prior, and was able to outpace the average competitor in the subsector when
comparing revenue growth, but not when comparing net income growth. FACEBOOK INC is extremely liquid.
Currently, the Quick Ratio is 5.88 which clearly shows the ability to cover any short-term cash needs. FB
managed to increase the liquidity from the same period a year ago, despite already having very strong
liquidity to begin with. This would indicate improved cash flow.

3.09 13.10 E 15.14 E At the same time, stockholders' equity ("net worth") has greatly increased by 26.92% from the same quarter
Q2 FY21 2021(E) 2022(E) last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial
difficulties in the near future.

INCOME STATEMENT STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
Q1 FY21 Q1 FY20 next 12-months. To learn more visit www.TheStreetRatings.com.
Net Sales ($mil) 26,171.00 17,737.00
EBITDA ($mil) 13,350.00 7,490.00
EBIT ($mil) 11,378.00 5,893.00
Net Income ($mil) 9,497.00 4,902.00

BALANCE SHEET
Q1 FY21 Q1 FY20
Cash & Equiv. ($mil) 64,476.00 60,426.00
Total Assets ($mil) 163,523.00 138,371.00
Total Debt ($mil) 12,141.00 10,814.00
Equity ($mil) 133,657.00 105,304.00

PROFITABILITY
Q1 FY21 Q1 FY20
Gross Profit Margin 87.93% 89.50%
EBITDA Margin 51.01% 42.22%
Operating Margin 43.48% 33.22%
Sales Turnover 0.58 0.53
Return on Assets 20.63% 15.14%
Return on Equity 25.24% 19.90%

DEBT
Q1 FY21 Q1 FY20
Current Ratio 6.08 4.60
Debt/Capital 0.08 0.09
Interest Expense NA NA
Interest Coverage NA NA

SHARE DATA
Q1 FY21 Q1 FY20
Shares outstanding (mil) 2,841 2,851
Div / share 0.00 0.00
EPS 3.30 1.71
Book value / share 47.05 36.94
Institutional Own % NA NA
Avg Daily Volume 17,654,857 20,450,039
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet nor any other party guarantees its accuracy or Report Date: June 27, 2021 PAGE 4
makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet, Inc. Copyright(c) 2006-2021. All rights reserved.
 June 27, 2021
NASDAQ: FB

FACEBOOK INC
Sector: Information Other Information Services
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 6/24/2021
NA NA 1.30 $822.3 Billion $207.11-$344.90 $343.18

RATINGS HISTORY VALUATION

Our rating for FACEBOOK INC has not changed BUY. FACEBOOK INC's P/E ratio indicates a significant discount compared to an average of 68.17 for the
since 5/1/2020. As of 6/24/2021, the stock was Other Information Services subsector and a significant discount compared to the S&P 500 average of 45.33.
trading at a price of $343.18 which is .5% below its For additional comparison, its price-to-book ratio of 7.29 indicates a significant premium versus the S&P 500
52-week high of $344.90 and 65.7% above its average of 4.48 and a discount versus the subsector average of 8.29. The price-to-sales ratio is well above
52-week low of $207.11. both the S&P 500 average and the subsector average, indicating a premium. Upon assessment of these and
other key valuation criteria, FACEBOOK INC proves to trade at a discount to investment alternatives.
2 Year Chart
$400
BUY: $192.60

BUY: $202.27

Price/Earnings 1 2 3 4 5 Price/CashFlow 1 2 3 4 5
premium discount premium discount
$300 FB 29.36 Peers 43.30 FB 24.42 Peers 27.15
• Discount. A lower P/E ratio than its peers can • Discount. The P/CF ratio, a stock’s price divided by
$200 signify a less expensive stock or lower growth the company's cash flow from operations, is useful
expectations. for comparing companies with different capital
• FB is trading at a significant discount to its peers. requirements or financing structures.
2019 2020 • FB is trading at a discount to its peers.

Price/Projected Earnings 1 2 3 4 5 Price to Earnings/Growth 1 2 3 4 5

premium discount premium discount
MOST RECENT RATINGS CHANGES FB 22.67 Peers 25.19 FB 0.98 Peers 0.43
Date Price Action From To • Average. An average price-to-projected earnings • Premium. The PEG ratio is the stock’s P/E divided by
5/1/20 $202.27 Upgrade Hold Buy ratio can signify an subsector neutral stock price the consensus estimate of long-term earnings
3/30/20 $165.95 Downgrade Buy Hold and average future growth expectations. growth. Faster growth can justify higher price
6/24/19 $192.60 No Change Buy Buy • FB is trading at a valuation on par with its peers. multiples.
Price reflects the closing price as of the date listed, if available • FB trades at a significant premium to its peers.

Price/Book 1 2 3 4 5 Earnings Growth 1 2 3 4 5

premium discount lower higher
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS FB 7.29 Peers 8.29 FB 60.13 Peers 73.18
(as of 6/24/2021) • Discount. A lower price-to-book ratio makes a • Lower. Elevated earnings growth rates can lead to
stock more attractive to investors seeking stocks capital appreciation and justify higher
39.74% Buy - We believe that this stock has the with lower market values per dollar of equity on the price-to-earnings ratios.
opportunity to appreciate and produce a total return of balance sheet. • However, FB is expected to trail its peers on the
more than 10% over the next 12 months. • FB is trading at a discount to its peers. basis of its earnings growth rate.

Price/Sales 1 2 3 4 5 Sales Growth 1 2 3 4 5

32.31% Hold - We do not believe this stock offers premium discount lower higher
conclusive evidence to warrant the purchase or sale of FB 10.33 Peers 9.63 FB 28.68 Peers 23.83
shares at this time and that its likelihood of positive total
• Average. In the absence of P/E and P/B multiples, • Higher. A sales growth rate that exceeds the
return is roughly in balance with the risk of loss.
the price-to-sales ratio can display the value subsector implies that a company is gaining market
investors are placing on each dollar of sales. share.
27.94% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with • FB is trading at a valuation on par with its • FB has a sales growth rate that exceeds its peers.
the risk involved too great to compensate for any subsector on this measurement.
possible returns.
DISCLAIMER:

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provided via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as
New York, NY 10005 well as other third-party data providers.
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provided for informational purposes only. You should not rely solely upon the research herein for purposes of transacting
Sales Contact: 866-321-8726 securities or other investments, and you are encouraged to conduct your own research and due diligence, and to seek the
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To the extent any of the information contained herein may be deemed to be investment advice, such information is impersonal
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Use found at http://www.thestreet.com/static/about/terms-of-use.html.

NAICS is the North American Industry Classification System which provides the Sector, Subsector, and Industry Group
structure used in this report. As many companies are diversified, the companies may also operate in other industry segments
than the one listed.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet nor any other party guarantees its accuracy or Report Date: June 27, 2021 PAGE 5
makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet, Inc. Copyright(c) 2006-2021. All rights reserved.