What a difference a month makes. Not that long ago, Facebook (NASDAQ:FB) was riding high again. After the Cambridge Analytica scandal knocked Facebook stock down from $190 to $150, the shares quickly bounced back. Following reassuring testimony from Mark Zuckerburg in front of Congress and a blowout earnings report, Facebook stock quickly shot up to new, all-time highs.

But recently, following a rather downbeat update on the company’s guidance, FB stock plummeted from $210 to $175 in a single trading session. It has, for the most part, continued heading lower since then and is now trading around $165. Is Facebook stock going to break the previous low reached during the height of the Cambridge Analytica scandal and fall below its support at $150? It’s possible, but there are reasons to embrace the bullish narrative here. And the only obstacle that could derail Facebook stock going forward is a major retreat of tech stocks and growth stocks.

Life for Facebook Stock After Cambridge

Now, to be sure, Facebook’s earnings growth is set to slow over the short-term. The company’s annual revenue growth is projected to drop from around 50% to somewhere between 30% and 39% as the company becomes more strict with advertisers and its user growth slows. And Facebook’s operating margins are set to trend downward as the company hires tons of new employees in an effort to crack down on offensive and manipulative content.

FB had to take these actions in order to win back its users’ confidence. Additionally, by taking strong self-policing steps now, Facebook is lowering the risk that regulators will punish the company harshly.

But even with the pressure on Facebook’s operating margins and the slowdown of its revenue growth, FB has hardly stalled out. Considering that Facebook stock is trading at less than 20 times its forward earnings, 30% revenue growth is pretty incredible, especially in this frothy market for tech stocks. Since Facebook cut its guidance, analysts’ consensus EPS growth estimate over the next five years has dropped from an average of 26% per year to an average of 22% per year. Think about this:  if Facebook’s EPS increases at an average of 20% per year, its earnings will double in less than four years. In that scenario, Facebook’s EPS would reach $16 by 2023, equaling a price-earnings ratio of about ten, based on the price of FB stock today.

Facebook Stock Is Dirt Cheap Compared to Its Peers

Facebook stock is now selling for about 22 times its trailing earnings and 19 times its forward earnings. And as I noted above, its earnings are expected to keep growing at a nice clip, despite its scandal-induced headwinds. On the other hand, Alphabet (NASDAQ:GOOGL,NASDAQ:GOOG) has price-earnings ratios of 31 times its trailing earnings and 25 times its forward earnings. Among the tech darlings with even higher price-earnings ratios are AMD (NASDAQ:AMD), Netflix (NASDAQ:NFLX), and Amazon.com (NASDAQ:AMZN).

On a price-sales basis, FB stock looks similarly compelling, considering the huge moat around Facebook’s advertising business. Amazingly enough, Snap (NYSE:SNAP) trades at a higher price-sales ratio than Facebook stock, as does Twitter (NYSE:TWTR). Given Facebook’s faster growth, fortress balance sheet, and huge operating profits, it’s hard to see how its valuation can stay this low once investors look past the Cambridge Analytica scandal.

There’s one thing that FB should do now to emphasize how cheap Facebook stock is: Return capital to shareholders. Facebook pays no dividend and only buys back a modest amount of its shares. As our Will Ashworth wrote earlier this year, the company could help increase investors’ confidence in FB stock by buying back more shares. With Facebook stock this undervalued compared to its peers, an expanded buyback of Facebook stock would be a highly effective way of creating shareholder value.

The Big Risk for Facebook Stock: A Tech Stock Retreat

It’s easy to make the bull case for FB stock. FB offers compelling value compared to other tech, internet, and momentum stocks. I own FB stock and see it as one of the best names in the tech arena, given current market conditions.

However, leading tech stocks, such as the FAANG names, have been outperforming the stock market as a whole for many years. That trend won’t go on forever. When sectors perform marvelously for a long period, they tend to revert to the mean later. Consider an example outside of tech: look at how badly energy stocks have done since 2014 after they delivered sparkling returns for a long time.

We’re seeing some warnings signs now as far as the continued prospects for momentum, tech, and internet stocks. Several highly popular stocks and industries are breaking down. Cryptos have destroyed a lot of wealth, particularly among younger investors, in 2018. Tesla (NASDAQ:TSLA) appears to be on the brink of a potentially catastrophic meltdown. And among marijuana stocks, signs of weakness have appeared after their recent, blistering run.

From a regulatory standpoint, risks are also mounting. The European Union is taking increasingly aggressive actions on privacy and hitting companies such as Alphabet with large fines. In the U.S., President Trump has been hostile toward both Alphabet and Amazon.com (NASDAQ:AMZN).

Given these headwinds, FAANG and momentum stocks may lose some of their luster. It’s no secret that FB stock and other such plays are loved by younger investors. These investors have enjoyed a great run in recent years, but they may sour on the market as more popular themes such as crypto and marijuana stocks go south. If that occurs, expect valuations across the FAANG space to come down pretty aggressively. Given that my bull thesis is that Facebook stock is the cheapest name in big tech, if valuations drop across the board, the relative margin of safety of FB stock will decline.

The Verdict on Facebook Stock

FB stock looks like a great buy here. I expect support to kick in between here and $150, leading to a sizable rebound. Compared to its peers, FB is clearly a bargain.

That said, it’s impossible to overlook the warning signs for tech and momentum stocks on the horizon. Hot trends in 2018 – including crypto, China, and now marijuana – are all taking hits. And in mega-cap tech, there are increasing obstacles as well. Facebook stock could drop farther than we expect if investors decide to dump their more aggressive growth holdings in coming weeks. As such, buying FB stock on further weakness could be the best play.

At the time of this writing, Ian Bezek owned FB stock.