The analysts believe that despite the increasing growth of the media company, there are a lot of things that have made them downgrade the firm's stock for near term future.
Facebook stock is one of those kinds which repeatedly receive positive comments from analysts. However, recently a research was carried out by a particular firm which ended up showing results in which it did not really prefer the social networking site and declared it as a stock that it did not exactly give preference to. One thing, on the other hand, should be taken into consideration that the same equity firm has shown downgraded Netflix a few weeks back while the company has received many positive upticks from all the other financial firms.
Even though Facebook business has shown massive signs of growing more and more in the future, the analysts at Societe Generale seem to be least bothered. The analysts of the firm have granted a rating of ‘sell’ to the media company despite the growth it has been observing lately. The equity firm is of the opinion that very soon the networking giant will be slowing down on the stock index and will start showing bearish signs which is why such a rating has been granted to it. This ‘sell’ rating is being observed by the analysts since the month of January and they have also shown their concerns over how the investors do not seem to agree to their choice of ratings for the social media company’s stock.
Societe Generale has also stated reasons why they believe the stock of the social media platform needs to be downgraded. One of those reasons is that the all the other equity firms are feeding on the fact that Facebook’s ad revenue seems to be rather positive on the index given the 73 percent of total cash revenues being earned through mobile advertisement. However, Generale analysts believe that this figure is too early to determine whether the mobile ad system any successful for the firm or not and have declared it to be rather ‘premature’.
The analysts have also informed in their research report that Facebook’s active user consumer time has shown a decline from the past two years which is another reason why they believe the popularity of the firm is going to decrease even more in the coming future. Even though the users of the social media are increasing day by day, the analysts of the firm are of the opinion that by the number of social networking apps that are being introduced every now and then, the media company’s popularity is sure to experience a dip. Furthermore, the fact that the social giant bought Whatsapp for such a huge price is being seen by the analysts in quite a negative manner.
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