If You Invested $1,000 In Facebook Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 SPY total return over the last 12 months is 50.2%. But there is no question some big-name stocks performed better than others along the way.

Facebook’s Run: One company that has been a decent investment in the last year has been social media giant Facebook, Inc. FB.

Fortunately for Facebook investors, the COVID-19 pandemic in 2020 was actually very good for Facebook’s business. While other companies were dealing with economic shutdowns, people around the world who were sheltering in place had little to do for entertainment and social interactions other than social media.

In fact, in 2019 Facebook reported $6.43 in EPS on $70.69 billion in revenue. In 2020, those numbers improved to $10.09 in EPS on $85.96 billion in revenue.

At the beginning of 2020, Facebook shares were trading at around $206.75. By the beginning of March, the stock was down to $194.03 as news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.

Facebook bottomed at $137.10 during the pandemic-driven March sell-off. Fortunately for Facebook investors, the dip did not last long.

By the end of May, Facebook shares were back at new all-time highs above $220, and the stock got as high as $304.67 in August prior to an extended consolidation period. The bullish run came on the back of explosive growth in Facebook’s user base and engagement numbers during the pandemic. In addition, investors were relieved that Facebook’s online advertising business continued to boom despite a high-profile ad boycott of Facebook in July.

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Facebook In 2021, Beyond: Facebook finally broke out to new highs in April 2021, eventually making it as high as $331.81 before pulling back to around $314.

Looking ahead into the next several quarters, Facebook is facing several potential headwinds.

Traders may continue taking profits in the stock, which has been one of the top market performers in recent years. They may also be concerned about further regulatory crackdowns on big tech stocks. In fact, the Federal Trade Commission and 46 U.S. states and districts announced lawsuits against Facebook back in December.

Or they may simply see 2020 pandemic comps setting Facebook up for some lackluster growth numbers in coming quarters.

Still, Facebook investors who bought one year ago and held on have generated a solid return on their investment. In fact, $1,000 in Facebook stock bought on May 4, 2020, would be worth about $1,595 today.

Looking ahead, analysts are expecting more upside for Facebook in the next 12 months. The average price target among the 44 analysts covering the stock is $390, suggesting 24.2% upside from current levels.

(Photo by Alex Haney on Unsplash)

Posted In: COVID-19 PandemicinveststockEducationGeneral

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