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Facebook: The Long and Short of It

Facebook (FB) and its FANG counterparts trade at a premium compared to most companies. All of them are valued with high forward price-earnings multiples, and all are billion-dollar companies that are disrupting the world in their own way. But if you take a closer look at the numbers, it is clear that Facebook stands out in terms of price-sales. Trading at nearly 17 times sales, which is nearly two and a half times more than that of Netflix (NFLX) and Alphabet (GOOGL) and more than five times that of Amazon (AMZN), this is one company that deserves a closer look.

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The question is: How can a company that recorded a net revenue of...