Why Facebook Inc (FB) Should Fear This Social Media Kingslayer

With over 1.7 billion monthly active users, it is no hyperbole to say that Facebook Inc (NASDAQ:FB) is the king of social media. Consider as well that the global population is 7.5 billion. Based on this statistic, nearly 23% of the world is actively using Facebook. Frankly, I don’t care what other metrics people use to judge FB stock. What I just mentioned more than explains its tremendous enthusiasm. Overwhelmingly bullish, most analysts see little reason to change that assessment.
Sure, Facebook stock may be getting a little rich on the valuation side of things. For instance, FB is trading at over 38-times trailing earnings. Roughly 61% of internet content and information companies feature a lower premium. That said, few competitors can claim as clean of a balance sheet, or as robust of an income statement as Facebook. Analysts are also loathe to abandon allegiances to FB stock because it completely destroys its publicly traded rivals. Take a look at Twitter Inc (NYSE:TWTR). Although President Trump’s favorite social media network has anywhere between 695 million to 1.3 billion registered users, its monthly active users total only 319 million.
Snap Inc’s (NYSE:SNAP) Snapchat app fares much worse. Last year, it managed to crack the 115 million user mark. In and of itself, that’s an impressive haul, but it’s less than 7% of active Facebook users.
Despite the fact that Snapchat is marketed towards the younger demographic, FB is still killing it in that area too. According to Statistic Brain, 48% of 18- to 34-year-olds check their Facebook account when they wake up, and 28% of the demographic do so before going to sleep. Nobody wants to be outright bearish on FB stock, for good reason.