Kessler notes that the stock at the time his note was published was trading at $26.33, down more than 30% from the company’s recent $38 IPO price, and below his $27 target price.
“We continue to have questions about monetization and mobile, spending on internal investment and acquisitions of third-party companies and intellectual property, and corporate governance,” he writes. “However, based on our estimates and calculations, FB has a 2013 P/E-to-growth ratio of 1.1X, which amounts to what we view as a reasonable premium to peers.”
FB is now down 79 cents, or 2.9%, to $26.11, a new post-IPO low.
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