Facebook (FB) Mimics Apple (AAPL) in This Key Spending Area...
Tweet
Share
E-mailGet Alerts FB Hot Sheet
Join SI Premium – FREE
Like using Facebook? Based on the following metric, fans may like investing in it even more following the company's upcoming IPO.
According to Bloomberg and SEC filings, Facebook (Nasdaq: FB)(NYSE: FB) is akin to Apple (Nasdaq: AAPL) with respect to how much it spends on R&D. Facebook has generally looked more to outside developers for most of its needs.
In 2011, Facebook spent about 10 percent of total sales on R&D. This number is multitudes lower than other tech rivals which recently went public. The lower spend has also increased margins from 16 percent in 2009 to 19 percent for 2010, and all the way to 27 percent in 2011. Comparably, the S&P 500 average is about 14 percent in 2011.
However, some believe Facebook might have already peaked. EBITDA profit margin was 56 percent in 2011...at the upper-end when compared with rivals.
But, all may not be fun and games for Facebook as rivals like Google's (Nasdaq: GOOG) Google+ continue to gain users. Facebook might be forced to ratchet spending on engineering to 15 percent of revs or more if it wants to retain its substantial social network lead.
Apple shares are up 1.4 percent Monday.
According to Bloomberg and SEC filings, Facebook (Nasdaq: FB)(NYSE: FB) is akin to Apple (Nasdaq: AAPL) with respect to how much it spends on R&D. Facebook has generally looked more to outside developers for most of its needs.
In 2011, Facebook spent about 10 percent of total sales on R&D. This number is multitudes lower than other tech rivals which recently went public. The lower spend has also increased margins from 16 percent in 2009 to 19 percent for 2010, and all the way to 27 percent in 2011. Comparably, the S&P 500 average is about 14 percent in 2011.
However, some believe Facebook might have already peaked. EBITDA profit margin was 56 percent in 2011...at the upper-end when compared with rivals.
But, all may not be fun and games for Facebook as rivals like Google's (Nasdaq: GOOG) Google+ continue to gain users. Facebook might be forced to ratchet spending on engineering to 15 percent of revs or more if it wants to retain its substantial social network lead.
Apple shares are up 1.4 percent Monday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Figure Technology Solutions reports Q2 2026 consumer loan volume up 132%
- Freedom Metals Acquisition prices $275M IPO on Nasdaq
- NextNRG secures $1M merchant cash advance from Avanza Capital
Create E-mail Alert Related Categories
Corporate News, Insiders' BlogRelated Entities
Standard & Poor'sSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
