Facebook (NASDAQ:FB) finds itself still recovering from its second-quarter earnings report. A disappointment on the revenue front sparked the largest single-day market cap loss in stock market history. Facebook stock has seen little movement since.

However, this sudden plunge creates a possible opportunity for new buyers. Given the lower valuation, predicted profit growth, and market dominance, investors have a chance to buy a high-growth stock at a low valuation.

Earnings Reaction and Facebook Stock

Facebook finds itself still reeling from its Q2 earnings report. The company beat earnings estimates by three cents per share. However, a revenue miss sent shares plummeting by almost 19% in trading the next day.

In my view, Wall Street lapsed on perspective as it frequently does. So, revenues of $13.23 billion missed by $120 million. However, despite the miss, on a year-over-year basis, revenue still rose by an astounding 42%! I fail to see how a $120 million revenue miss justifies wiping out $119 billion from its market cap.

However, such moves create an opportunity for those who maintain their perspective. I thought values had become frothy before the earnings announcement. The massive drop in the Facebook stock price changes the value proposition.

Facebook and Market Dominance

Consensus earnings now stand at $7.18 per share. If those earnings hold, this places the forward price-to-earnings (PE) ratio at just above 25. This puts the multiple close to current S&P 500 averages.

However, profit growth stands well above S&P averages, and analysts predict profit growth of 33.2% for this fiscal year. Over the next five years, they expect that growth to average 22.2% per year.

This takes the price-to-earnings-to-growth (PEG) ratio to 0.76 for this year. The PEG will rise to just above 1.1 on a longer-term basis. Whichever metric one chooses, that still comes in below the long-term S&P PEG average of 1.33.

Meanwhile, Twitter (NYSE:TWTR) trades at higher PE while it struggles to grow its user base. Snap (NYSE:SNAP) fights to find a path to profitability at all.

Investing in LinkedIn can only occur indirectly by buying Microsoft (NASDAQ:MSFT). However, MSFT stock trades at a higher multiple than Facebook. When it comes to social media investing, Facebook offers both industry dominance and the cheapest valuation in the industry.

Moreover, every setback has proven to become a buying opportunity, at least in the medium and long-term. Early this year, Facebook stock took a hit when Mr. Zuckerberg announced that users spent less time on Facebook. The stock price fell further when the company admitted that the Cambridge Analytica scandal had involved 50 million accounts.

Facebook recovered from both setbacks.

Facebook Has a Great Cash Position

The company’s success has helped Facebook to amass a cash hoard that stood at $42.3 billion at the end of the second quarter. This gives Facebook options. The company has successfully produced its own growth. With its cash, it can also buy the growth it cannot create itself.

They probably should also consider a dividend. With a market cap approaching $520 billion, it has become one of the world’s largest companies.

Given its size and cash holdings, it can afford the dividend that would open the stock to a new class of investors. This dividend would also give growth-oriented investors an excuse to shrug off the company’s recent challenges and invest in Facebook stock.

The Bottom Line on Facebook Stock

Investors should take another look at Facebook after this recent plunge. Facebook fell 19% in one day on a revenue disappointment. The stock has seen little movement since. However, the drop took the company’s PEG ratio well below S&P 500 averages.

Moreover, most analysts believe the revenue disappointment will not interrupt the high growth Facebook continues to enjoy. The fact that Facebook dominates the social media reinforces this case. Furthermore, a significant cash position gives the company the chance to either buy more growth or begin paying dividends.

The company periodically takes a hit when bad news arises. Historically, such times have served as a buy signal for Facebook. In all likelihood, it isn’t different this time.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.