Facebook Inc.'s (FB) shares dropped 1.8%to $168.17 at 11:44 a.m., as the company Chief Operating Officer Sheryl Sandberg defended the company's handling of its data, privacy and censorship issues in recent months before the Senate Intelligence Committee on Wednesday.
She spoke alongside Twitter's (TWTR) CEO and co-founder Jack Dorsey.
The stock sank to 167.56 earlier, the lowest level since April. Twitter's shares plunged 4.9% on Wednesday.
Alphabet Inc's Google (GOOG) executives were absent from the Washington hearing, even through they were invited to testify earlier. Alphabet's shares sank 2%.
Facebook's recent troubles are raising questions about its valuation as the social media giant sees two of its FAANG peers leap over a $1 trillion mark and the company to lowered its guidance for the rest of the year.
Concerns about the company's revenue growth for the second half of the year led to a 20% one-day drop following July earnings, persistent public pressure, and a slew of recent downgrades.
One such downgrade came from Michael Nathanson, senior research analyst at MoffettNathanson LLC.
"The deceleration in growth, coupled with continued regulatory scrutiny, is a toxic brew for any stock," he wrote in a note provided to Real Money. "We are downgrading Facebook to neutral from buy and lower our price target to $175 from $200."
As a result, he is lowering his 2019 EBITDA estimate by 3%, lowering the company's proposed valuation. He now slates an EBITDA multiple of 12.
Jim Cramer's Action Alerts Plus Team was confident in the company's long-term outlook and the management's ability to manage expectations.
"When it came down to the $160s today, down from $218 and down 3% for the year it does seem like a buying opportunity," said Jim Cramer in a note to AAP subscribers on Tuesday. "After all it is selling at 23 times earnings and is expected to have growth--$8.21 next year and $9.50 in 2020 off of a $7.17 basis for this year-which seems cheap to me."
The AAP research team noted Facebook remains "discounted relative to its fundamental performance," and we remain of view that management's weak guide could ultimately prove to be an under-promise, over-deliver scenario."
Compared to its peers, Facebook's valuation is attractive as well.
"[The] valuation is also reasonable as Facebook trades in line with or at a modest discount to future earnings estimates of durable blue-chip companies, despite four to ten times the forward growth potential," says Scott Devitt, managing director of internet research Stifel Financial Corp.