Facebook's price-to-earnings (P/E) ratio was now 40.69. This was twice the 18.57 P/E ratio of other social media companies.
However, for most of the year, Facebook traded fairly flat. Also, it has failed to reach the US$38 per share price when it was first offered publicly in 2012. This has led investors to question whether the internet giant has truly maximized its massive user base as well as mobile usage.
Still, investors quickly jumped on its stock upon the rollout of the company's results last July 24, resulting in its biggest-ever daily increase. The report indicated that Facebook was making progress in monetizing its user base and was doing well with mobile ads.
"Facebook is doing a good job on the innovation front, going from a weak area - mobile advertising - to creating something pretty damn powerful," said Chris Hobart, Hobart Financial Group CEO. "The results justify the valuation, but with it at these levels there are other companies I would look at first," added Hobart.
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