Lockheed Martin makes 3 times the revenue Facebook makes and produces MUCH more sophisticated products. Why do investors value Facebook stock more?
Stoo: Stock prices are all speculation on future returns. Many stocks are overinflated.
I am guessing there is a larger customer base. Facebook has the potential to earn from individual consumers, whereas Lockheed Martin mainly has government and airline contracts. Just my best guess.
Facebook has more "future potential" as a business than does Lockheed Martin….
Stock prices are a product of what investors are willing to risk as a consequence of their EXPECTATIONS for the future performance of a business….