Facebook reports roughly 64.22
B in cash with 39.99
B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 22.65.
Macroaxis provides advice on Facebook to complement and cross-verify current
analyst consensus on Facebook. Our investment recommendation engine determines the company's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
Facebook
financial leverage refers to using borrowed capital as a funding source to finance Facebook ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Facebook financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Facebook's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Facebook's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Facebook's total debt and its cash.
To perform a cash flow analysis of Facebook, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Facebook is receiving and how much cash it distributes out in a given period. The Facebook cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Investors in Facebook can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Facebook. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Facebook and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Facebook is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Facebook for more details
Facebook appears to be very steady, given 3 months investment horizon.
Facebook secures Sharpe Ratio (or Efficiency) of 0.12, which denotes the company had 0.12% of return per unit of standard deviation over the last 3 months. Our philosophy in predicting the volatility of a stock is to use all available market data together with stock-specific
technical indicators that cannot be
diversified away. We have found twenty-seven
technical indicators for Facebook, which you can use to evaluate the future volatility of the firm. Please utilize Facebook's Semi Deviation of 1.53,
downside deviation of 1.72, and Mean Deviation of 1.66 to check if our risk estimates are consistent with your expectations.
Can Facebook build up on the current rise?
Facebook current variance builds up over 4.41. Facebook has relatively low volatility with skewness of 0.55 and kurtosis of 0.88. However, we advise all investors to independently investigate Facebook to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Facebook's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Facebook's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Bottom Line On Facebook
Whereas some firms within the internet content & information industry are still a little expensive, even after the recent corrections, Facebook may offer a potential longer-term growth to investors. Taking everything into account, as of the 15th of May 2021, we believe that at this point, Facebook is
overvalued with
very small probability of distress within the next 2 years. However, our overall buy vs. sell advice on the company is
Strong Buy.
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Try AI Portfolio ArchitectRifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of Facebook. Please refer to our
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