Facebook Inc. (NASDAQ:FB) stock had been on a steady decline since its May IPO, but after bottoming out at less than $18 a share, the stock made a post-Zuck rally back over $20 after CEO Mark Zuckerberg spoke at the TechCrunch Disrupt conference in the Bay Area a couple weeks ago. But while the stock is still 40 percent below its IPO price of $38 a share and is up about 20 percent since its low, should analysts be lining up to buy the stock at this point?
Facebook Inc. (NASDAQ:FB) would like to think that its comeback is coming, but one respected Wall Street newspaper, Barron's, apparently thinks that a Facebook comeback isn't in the near term. The newspaper mentioned that there is still much uncertainty about the revenue future of the Web site and Barron's stated that the stock is still selling at a high multiple of both sales and earnings. The newspaper also cited that with more than half of Facebook Inc. (NASDAQ:FB) users are accessing the site through mobile devices like smartphones and tablets, and that seems to be a problem for Facebook brass, including Zuckerberg.
Facebook Inc. (NASDAQ:FB) developed very quickly in the PC space, but as the world has become more mobile, Zuckerberg admitted that his company is a couple years behind on mobile tech and is trying to catch up. Currently, Barron's notes, Facebook trades at nearly 50 times its projected 2012 profit and about 35 times earnings. The newspaper compared that with a couple of well-established tech companies, Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG), which both currently trade at about 16 times their earnings - which is half of Facebook. And while Facebook Inc. (NASDAQ:FB) trades at 10 times its projected revenue for 2012, Google Inc. (NASDAQ:GOOG) trades at half that valuation, about five times its revenue.
In conclusion, Barron's came to the result that Facebook Inc. (NASDAQ:FB) is still overpriced and probably would be fairly valued at about $15 a share. That is bad news for short-term investors, but with the work Facebook is doing for long-term growth, this might be good news for those who might be looking for a long-term position - alongside investors like hedge-fund manager George Soros of Soros Fund Management.