Is Facebook Inc (FB) Overvalued?

Facebook Inc (NASDAQ:FB)’s shares have been on fire lately. In the last two years to date, Facebook Inc (NASDAQ:FB)’s stock has returned 291 percent, but many believe that it has the potential to go much higher. While the majority of analysts are very bullish on Facebook Inc (NASDAQ:FB), there are skeptics like Janney’s Tony Wible, who even though downgraded the stock from ‘Buy’ to ‘Neutral’,  still has positive things to say about the company. Ari Wald, head of technical analysis at Oppenheimer & Co. and Chad Morganlander, portfolio manager at Stifel Nicolaus’ Washington Crossing Advisors, recently discussed their outlook on Facebook Inc (NASDAQ:FB)’s stock on Yahoo! Finance.

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“The call is probably for a 5 to 10% pullback and that’s what the call is and that’s no surprise. Facebook Inc (NASDAQ:FB) is as growthy of a growth stock as you can get. We do like it here at Stifel Nicolaus. We have a ‘Buy’ rating on it with a price target of roughly $90 to $95 a share, but investors have to be cautious about the volatility of the company and know what they are getting into […],” Morganlander said.

Morganlander believes that in the course of next 24 months Facebook Inc (NASDAQ:FB) is going to see a revenue growth of over 35%, which means revenues for 2015 will stand at $15 billion and for 2016 they will amount to $22 billion. He considers that Facebook Inc (NASDAQ:FB) is a kind of investment where investors need to be pragmatic and if someone is a growth investor, they ought to put a small portion of their money in Facebook Inc (NASDAQ:FB)’s stock and profit from its volatility.

“It looks good and that’s why the downgrade based on stock performance is a bit of head scratcher for me. Really a stock coming off a new high isn’t a reason to sell it, when it has got a lot of other great things going for it […],” Wald added.

Disclosure: None

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