GO
Loading...

Valuation Expert Aswath Damodaran Reveals Facebook Estimate

Wednesday, 22 Aug 2012 | 12:39 PM ET

Prof. Aswath Damodaran is famed for his ability to value a company and he tells us that he’s amazed how quickly the market turned on Facebook.

“When you look at the plusses and minuses – not that much has changed,” he says on CNBC’s Fast Money Halftime Report.

“I’ve lowered my revenue growth estimates based on the earnings report and I brought down my margins but Facebook still has incredible potential and the capacity to monetize the potential is still there.”

Facebook Worth Buying at This Price: NYU Valuation Expert
Aswath Damodaran, professor of finance at the Stern School of Business at NYU and renowned expert on valuation, says Facebook is worth buying for the long term at this price.

And for that reason Damodaran says Facebook should be a $24 stock.

However, that’s not the level at which he’d buy.” I’m concerned about corporate governance,” he says. “The deck is stacked against investors – there’s a better chance that Russia gets rid of Putin than Wall Street gets rid of Zuckerberg.”

He also says the stock has fallen out of favor. “Momentum is a dangerous thing, so it could keep going down.”

However, there is a level at which Damodaran tells us Facebook would just be too cheap too pass up. You can find his entry point in the video above.

Posted by CNBC's Lee Brodie

______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.


Trader disclosure: On August 22, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long SBUX; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long AAPL; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long EMC; Joe Terranova is long NXPI; Steve Weiss is short: AAPL PUTS; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long XLU

For Steve Milunovich
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: DELL
This company/entity is, or within the past 12 months has been, a client of UBS Securities LLC, and investment banking services are being, or have been, provided.: HPQ





CNBC.com with wires.

Contact Halftime Report

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.