Boeing (NYSE:BA) stock has struggled over the past few weeks as the company has dealt with backlash from two fatal 737 MAX crashes, which happened as the result of a software error.

At first, investors freaked out, and Boeing stock dropped from $440 to $360. Then, investors assumed that this was an isolated incident and that its financial impact was relatively low, so Boeing stock staged a swift recovery to $400.

But ever since then, analysts and journalists have opened a can of worms related to Boeing’s design and engineering practices, which have combined to shine an unfavorable light on the company. Boeing stock has consequently dropped, and today trades below $360.

Sound familiar? It should.

A very similar thing happened to Facebook (NASDAQ:FB) in 2018. Facebook stock dropped early in the year on the Cambridge Analytica scandal. FB then rebounded swiftly, as investors assumed Cambridge Analytica to be an isolated incident, and predicted that its financial impact would be relatively mitigated.

But that wasn’t the case. Facebook stock dropped sharply after analysts and journalists opened a can of worms related to Facebook’s date protection and privacy  policies. Taken together, these revelations illustrated that the Cambridge Analytica incident wasn’t as isolated as originally thought.

Ultimately, Facebook stock rebounded in a big way from its 2018 data privacy scandals. But, that rebound took a while to play out. The stock dropped a lot before it bottomed and reversed course.

The same will be true for Boeing stock. So, while things will get better for BA stock in the long run, they will get worse first.

Boeing’s Can of Worms

At this point, the big problem for Boeing stock  is that the 737 MAX crashes opened up a can of worms related to Boeing’s design and engineering practices. Moreover, the news flow coming out of that can of worms is relentlessly negative.

Reuters reported in early May that BA did not disclose a safety-alert problem with the 737 MAX  to regulators and airlines for more than year. Also in early May, The Wall Street Journal reported that Boeing limited the role of its own test pilots in the final stages of developing the 737 MAX flight-control system. The big concern was that pilots “didn’t receive detailed briefings about how fast or steeply the automated system known as MCAS could push down a plane’s nose,” among other things, according to The Journal.

There was also a New York Times piece which reported that BA’s  culture  has often “valued production speed over quality.” On top of all this negative press, regulators are taking a good hard look at Boeing, and how it designs, manufacturers, and tests its planes.

Overall, Boeing’as 2019 scandal looks almost identical to Facebook’s 2018 scandal. In Facebook’s case, the negative news flow about its data-privacy practices caused FB stock to drop more than 40% over the course of five months. As of today, the negative news flow about Boeing’s engineering practices has caused BA stock to fall 20% over the course of 2 months.

As a result, I think there’s still another shoe to drop for Boeing. Actually, there are probably a few more shoes to drop. As those shoes drop, Boeing stock will continue to slide.

Boeing Stock Still Isn’t Cheap

Another big problem for Boeing stock at its current levels is that, despite all the headline and optics risks facing BA, Boeing stock is still richly valued.

The forward earnings multiple of Boeing stock sits at 23. That’s above the market’s  average forward multiple of 17, and also above Boeing stock’s average historical forward multiple of under 19.

Meanwhile, the dividend yield of BA stock hovers around 1.9%. That’s roughly in-line with the market’s average yield, but below the stock’s historical average yield of 2.2%.

In other words, although Boeing is staring at a plethora of headwinds, Boeing stock still trades at a premium valuation. Sure, bulls will argue that this premium is warranted because these headwinds won’t have a major financial impact. But the longer the negative catalysts stick around, the more likely they will cause Boeing to  lose contracts and market share, hurting its financials.

So until the valuation of BA stock falls back to “normal” levels, the “buy the dip of Boeing stock” thesis doesn’t look that compelling.

The Bottom Line on BA Stock

Boeing stock will eventually rebound from the 737 scandal. But it won’t do so in the near-term. For the time being, things will likely get worse before they get better. As a result, investors looking to buy the dip should wait awhile.

As of this writing, Luke Lango was long FB.