Facebook, Inc. (NASDAQ:FB)

This is too overvalued compared to other social media companies

The stock has been heavily hammered over the last year.

FB's revenue growth will go forward as more advertisers turn to Facebook.

I also see Facebook strongly bolstering it's position by acquiring companies left right and center

Pitch by: captainCruncher :

caps.fool.com/Pitch/FB/6714168/facebooks-valuation-rests-on-t.aspx

"Facebook's valuation rests on the company's huge user base, but the company still has to successfully monetize that user base. They may do that, but it won't be through advertising, which is the current plan. Google was successful with advertising because people use their service to search for things. Often, they are even actively searching for things to buy. People use Facebook to connect with people, and advertisements are seen as an annoyance during social time. Facebook may yet find a great way to monetize their platform, but they aren't anywhere close, and I believe investors will grow impatient before they get there."

Not a huge believer in Facebook. Social media has historically had a short shelf life. Facebook has been more resilient than most, but usage statistics suggest declining interest and a lot of surveys show that teenagers care much less about FB than they did even 12 months ago.

If FB were to ever have a quarter with negative revenue growth, or even see revenue growth fall to the single digits, then look out below. This stock will plunge!

FB is difficult to value given its dynamics, but if growth stalls, I don't think it's worth more than $15. If this company falls into a revenue spiral, then it may not be worth much more than $6. While I can't predict the future, I think it's unlikely that FB is worth it's current price of $27.

CEO Mark Zuckerberg is somewhat naive, doesn't seem to understand the role investors play, and doesn't seem to care. Why should he? He's the youngest billionaire in the world. He has a life, friends, family, etc.

Showing up to your own IPO looking like a college drop-out shows a severe lack of respect. If you beleive the hype surrounding the somewhat shady foundations of Facebook, then I wouldn't trust the out-of-touch, self-certain, and invasive Facebook team.

no value.

Poor business model. Users != revenue. Users are already becoming weary of the "free" model, where "free" eventually means "sell my info and bombard me with ads".

Facebook is everywhere, Businesses have to be on Facebook, with all those visitors Facebook can find ways to make revenue and more from ads.

needs time buy till become a force.

Once Facebook solves their monetization issue they are going to be able to take advantage of their users (half of the global internet) and increase in value.

Facebook's valuation rests on the company's huge user base, but the company still has to successfully monetize that user base. They may do that, but it won't be through advertising, which is the current plan. Google was successful with advertising because people use their service to search for things. Often, they are even actively searching for things to buy. People use Facebook to connect with people, and advertisements are seen as an annoyance during social time. Facebook may yet find a great way to monetize their platform, but they aren't anywhere close, and I believe investors will grow impatient before they get there.

membership rising, 24% increase in gaming year over year, potential to sell member preferences and integration into other tech comapnies

Facebook is rapidly advancing the capabilities of its advertising platform.

Heres the issue: People do eventually get sick of facebook. I've seen this with many people I know, and its only going to get worse. Their only hope is to model themselves after LinkedIn

Can't see any difference between this stock and what happened to MySpace or Yahoo in the past. Their business model can easily be copied and they face a formidable competitor in Google.

They are about to monitize their newsfeed by adding Atlas from Microsoft and Cropup. Stores will be able to sell directly without a store front in facebook and FB will make a share. Top that google! You can read about crop up here.
http://www.insidermonkey.com/blog/facebook-inc-fb-adds-cropup-to-e-commerce-stable-80064/

Unless the board forces Zuckerberg out as CEO, I see Facebook losing value for shareholders in the long-term because I don't really believe that's where his head is. Mark is not like a Bill Gates or a Steve Jobs, I believe he is far more interested providing a product that is a good tool for it's users rather than using the information at FB's fingertips to make money. And while you can do both (as Jobs did after his return to Apple), I just don't feel that's what Zuckerberg's strength is... he likes to create and build things, he just doesn't like to run them after they're made. Get a new CEO if FB wants to make money.

Overvalued. While I'm fine with them reinvesting most of their operating profit back into the company in the form of R&D, their inability to effectively monetize their service 8 years after they started it does not give me confidence that they will have substantial profits anytime soon. They might have something going in the next 8 years, but I'm not sure they will still be very relevant then. We're seeing more and more examples that their moat is not nearly as strong as everyone once thought.

It's official: Facebook is no longer cool. The younger generation of teens and twenty-somethings, who have historically been the heaviest users of Facebook, is moving towards newer and more interesting services such as Instagram, Twitter, Tumblr, and Snaphat. As well, surveys have shown that most of Facebook's users have a low opinion of the company.

Even if none of this were true, and nobody ever got tired of Facebook, problems still present. Thus far, Facebook has been unsuccessful in monetizing their mobile app. As mobile devices become more entrenched in Western life, and as many people in emerging markets such as India and China are getting smartphones as their first internet-enabled device, this is a huge issue. For these reasons, Facebook's growth is likely not sustainable.

On top of all that, Facebook is a grossly overvalued stock. Facebook's current stock price has a trailing PE ratio of 1845, with earnings growth of ~62% (which, for reasons argued above, is probably not sustainable). The PEG ratio, based on the average of the 3 and 4 year historical EPS growth rates using the current fiscal year EPS estimate, is 29.2, which is not a very attractive value.