Google Inc (NASDAQ:GOOG) is set to release its earnings report for the three months ending September this afternoon, but that’s not what Internet investors appear to be concentrating on today. Facebook Inc (NASDAQ:FB) shares traded above $52 for the first time in the company’s history this afternoon.
In the meantime, Google Inc (NASDAQ:GOOG) shares slumped today by close to 1 percent. The company’s earnings are expected to show difficulty attracting ad dollars to Enhanced Campaigns, and exposure to potentially weak international markets. Facebook Inc (NASDAQ:FB) investors appear to be optimistic despite the firm’s high valuation and many other problems.
Yesterday marked the second time that Facebook Inc (NASDAQ:FB) shares rose above the mental $50 barrier. The firm’s shares traded above that level throughout the end of September, but slumped in the second week of October. The close of the U.S. government shut down has helped to buoy the shares, but that doesn’t mean they are going up forever.
Facebook Inc (NASDAQ:FB) shares have close to doubled in value through 2013. Much of that rise came after the firm’s second quarter earnings report. In that release, the company showed incredible improvements in its mobile advertising numbers. Investors decided that it was time to lift the IPO weight from the firm’s shares, and happily reinvested.
According to consensus numbers from analysts, Facebook is expected to earn $0.98 per share for the full year in 2014. At a price of $52 per share the company’s forward P/E is just over 53. That ratio prices in a huge amount of growth, but it’s nothing compared to the 2012 P/E of 196 the company is trading at right now.
Facebook risk factors
Facebook Inc (NASDAQ:FB) has its share of risks in the market, and most of them are cloaked in the Google Inc (NASDAQ:GOOG) brand name. One of the more interesting analyses that has emerged about the company in recent times came from Ben Edelman, Harvard Business School Associate Professor. He’s short Facebook, and he doesn’t think the company has much of a future.
Facebook Inc (NASDAQ:FB) investors may be jubilant today, but they will be watching Google Inc (NASDAQ:GOOG) results closely this afternoon. Any sign of better-than-expected Google mobile growth or softness in some of the markets Facebook works in could remove today’s gains from the firm’s stock.
