We've read quite a few articles showing how far down Facebook (FB) would have to trade to have a valuation that's similar to big blue chip tech names like Apple (AAPL), Google (GOOG) and Microsoft (MSFT). This kind of analysis is done to show that Facebook shares are overvalued. But the analysis can go the other way as well. There are 34 stocks in the Russell 1,000 that have a higher forward P/E (next 4 quarters) than Facebook (FB) right now, and quite a few of them are stocks that are loved by some of the same investors that are likely dumping on Facebook.
Below is a list of these 34 stocks with higher valuations than Facebook (FB). In the table we also show where Facebook (FB) would be trading in price if it had the same valuation as each stock.
LinkedIn (LNKD) has been a social media stock that many have contrasted Facebook (FB) with over the last two weeks. This is because LinkedIn soared on the day of its IPO, and it has continued to trade higher ever since. What hasn't been mentioned to go along with this, however, is that LNKD has a forward P/E of 120, which is nearly three times as high as Facebook's. If Facebook had the same valuation as LNKD, it would be trading at $67.11.
Amazon.com (AMZN), Regeneron (REGN), Salesforce.com (CRM), and Equinix (EQIX) are a few other stocks that are currently loved by traders, but just like LNKD, they have much higher valuations than Facebook. We don't hear every day how much these stocks are overvalued, however, because they have been winners for investors.
The negative news about Facebook has been relentless since its IPO date, and all we read now is that it needs to trade down to "xx" level to be fairly valued. We haven't owned FB yet and don't currently plan on owning it, but we feel that it's worth pointing out that growth stocks trade at high valuations all the time, and they can trade higher for a long time when they have very high forward P/Es. While we wouldn't be surprised to see the stock go lower from here, we also wouldn't be surprised to see it go higher for awhile either.