Facebook (FB) Downgraded by Zacks Investment Research

Zacks Investment Research cut shares of Facebook (NASDAQ:FB) from a buy rating to a hold rating in a research report sent to investors on Thursday.

According to Zacks, “Facebook’s top-line benefits from mobile ad growth. The company’s expanding footprint in the developing countries is a positive. Further, the company’s initiatives related to Messenger, WhasApp and Watch are noteworthy. Shares have outperformed the industry in the past year. Nevertheless, aggressive investments on initiatives related to improving ad transparency and security are expected to hurt profitability in the near term. Further, the company is expected to lose some ad impression opportunities due to its focus on growth of Stories on the core Facebook app. This is expected to negatively impact top-line growth. Additionally, regulatory headwinds in countries like Vietnam, Indonesia and Germany is a concern. Meanwhile, estimates have been stable lately ahead of the company’s Q4 earnings release. The company has mixed record of earnings surprises in recent quarters.”

FB has been the topic of several other research reports. Morningstar set a $186.00 price objective on shares of Facebook and gave the stock a buy rating in a report on Thursday, October 11th. Argus lowered their price objective on shares of Facebook from $237.00 to $210.00 and set a buy rating on the stock in a report on Wednesday, October 3rd. Wells Fargo & Co restated a buy rating and set a $220.00 price objective on shares of Facebook in a report on Monday, October 1st. Barclays restated a buy rating and set a $180.00 price objective on shares of Facebook in a report on Friday, September 14th. Finally, Cleveland Research restated a buy rating on shares of Facebook in a report on Thursday, September 13th. Four analysts have rated the stock with a sell rating, nine have assigned a hold rating, thirty-eight have assigned a buy rating and one has assigned a strong buy rating to the company’s stock. Facebook has an average rating of Buy and a consensus price target of $186.92.

Facebook stock opened at $143.80 on Thursday. Facebook has a 12-month low of $123.02 and a 12-month high of $218.62. The firm has a market cap of $418.99 billion, a P/E ratio of 23.34, a P/E/G ratio of 0.92 and a beta of 0.58.

Facebook (NASDAQ:FB) last released its earnings results on Tuesday, October 30th. The social networking company reported $1.76 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $1.46 by $0.30. Facebook had a net margin of 37.57% and a return on equity of 27.89%. The company had revenue of $13.73 billion for the quarter, compared to the consensus estimate of $13.82 billion. During the same quarter in the previous year, the company earned $1.59 EPS. Facebook’s quarterly revenue was up 32.9% compared to the same quarter last year. Research analysts expect that Facebook will post 7.37 earnings per share for the current fiscal year.

In related news, insider Christopher K. Cox sold 3,300 shares of the firm’s stock in a transaction that occurred on Monday, November 5th. The shares were sold at an average price of $150.09, for a total value of $495,297.00. Following the sale, the insider now directly owns 115,837 shares of the company’s stock, valued at $17,385,975.33. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Susan J.S. Taylor sold 2,112 shares of the firm’s stock in a transaction that occurred on Monday, November 19th. The shares were sold at an average price of $137.50, for a total transaction of $290,400.00. Following the completion of the sale, the insider now directly owns 6,927 shares in the company, valued at $952,462.50. The disclosure for this sale can be found here. Over the last three months, insiders sold 426,550 shares of company stock worth $60,096,109. Insiders own 16.25% of the company’s stock.

Hedge funds and other institutional investors have recently modified their holdings of the business. Schwab Charles Investment Management Inc. grew its holdings in shares of Facebook by 4.0% in the second quarter. Schwab Charles Investment Management Inc. now owns 8,774,424 shares of the social networking company’s stock worth $1,705,047,000 after purchasing an additional 337,909 shares during the last quarter. First American Bank bought a new stake in Facebook in the third quarter valued at $6,317,000. Montrusco Bolton Investments Inc. boosted its holdings in Facebook by 14.0% in the third quarter. Montrusco Bolton Investments Inc. now owns 106,851 shares of the social networking company’s stock valued at $17,525,000 after acquiring an additional 13,124 shares in the last quarter. TIAA FSB boosted its holdings in Facebook by 14.2% in the second quarter. TIAA FSB now owns 130,181 shares of the social networking company’s stock valued at $25,297,000 after acquiring an additional 16,212 shares in the last quarter. Finally, HT Partners LLC bought a new stake in Facebook in the second quarter valued at $297,000. Institutional investors and hedge funds own 58.14% of the company’s stock.

About Facebook

Facebook, Inc provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide. Its products include Facebook Website and mobile application that enables people to connect, share, discover, and communicate with each other on mobile devices and personal computers; Instagram, a community for sharing visual stories through photos, videos, and direct messages; Messenger, a messaging application to communicate with other people, groups, and businesses across various platforms and devices; and WhatsApp, a mobile messaging application.

Recommended Story: New Google Finance Tool and Screening Stocks

Get a free copy of the Zacks research report on Facebook (FB)

For more information about research offerings from Zacks Investment Research, visit Zacks.com

Analyst Recommendations for Facebook (NASDAQ:FB)

Receive News & Ratings for Facebook Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Facebook and related companies with MarketBeat.com's FREE daily email newsletter.