Wall Street Thinks Facebook Will Grow 29 Times Faster Than AppleJanuary 25, 2013 2:45 pm
We have kept this math simple – at current market prices, Facebook is trading at a P/E of 290.95, and AAPL is trading at a P/E of 10.21. Wall Street really thinks that Facebook is likely to grow 29 times faster than Apple? wow.
okay, if that understanding is wrong, here is one more: “The PEG ratio (Price/Earnings To Growth ratio) illustrates the relationship between stock price, earning per share, and the company’s growth rate. The PEG ratio consists of the PE ratio divided by the company’s growth rate. Using just the PE ratio makes high-growth companies look overvalued relative to others. By dividing the PE ratio by the earnings growth rate, the PEG ratio allows investors to accurately compare companies with different PE ratios and growth rates.”
FB PEG Ratio (5 Year expected) : 2.03
AAPL PEG Ratio (5 Year expected) : 0.73
Really? With half-a-billion iOS devices on the planet?