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Meta Platforms Inc Class A META

Morningstar Rating
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Stock XNAS Rating as of
$432.67 −60.83 (12.33%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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Meta Earnings: Another Potential Investment Surge Overshadows Solid Growth

Michael Hodel

Meta posted a solid first quarter, with revenue growth and management’s second-quarter outlook—while modestly disappointing relative to FactSet consensus—putting the firm on a path to exceed our 2024 revenue expectations. However, the firm increased its budget for both full-year operating expenses and capital spending, with CEO Mark Zuckerberg convinced that the firm should “invest significantly more in the coming years” into artificial intelligence. Zuckerberg expects a big step up in investment before AI services generate meaningful direct revenue. After accounting for faster revenue and expense growth in our forecast, we’re leaving our fair value estimate at $400 per share. With the selloff following the earnings release, we believe the shares are fairly valued.

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Price vs Fair Value

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META is trading at a 20% premium.
Price
$481.73
Fair Value
$216.00
Uncertainty
High
1-Star Price
$326.00
5-Star Price
$832.00
Economic Moat
Bxdh
Capital Allocation
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Bulls Say, Bears Say

Bulls

With more users and usage time than any other social network, Meta provides the largest audience and the most valuable data for social network online advertising.

Bears

Meta is currently a one-trick pony and will be affected severely if online advertising no longer grows or if more advertising dollars shift to others like Google or Snapchat.

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News

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Trading Information

Previous Close Price
$493.50
Day Range
$414.51–445.75
52-Week Range
$207.14–531.49
Bid/Ask
$432.50 / $432.72
Market Cap
$1.10 Tril
Volume/Avg
41.0 Mil / 16.5 Mil

Key Statistics

Price/Earnings (Normalized)
30.93
Price/Sales
9.67
Dividend Yield (Trailing)
0.10%
Dividend Yield (Forward)
0.41%
Total Yield
1.67%

Company Profile

Meta is the world’s largest online social network, with nearly 4 billion family of apps monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. The firm’s ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the firm’s total revenue, with more than 45% coming from the US and Canada and over 20% from Europe.
Sector
Communication Services
Industry
Internet Content & Information
Stock Style Box
Large Growth
Total Number of Employees
69,329
Website
https://about.meta.com

Competitors

Valuation

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Metric
META
VZ
SNAP
Price/Earnings (Normalized)
 30.938.43116.60
Price/Book Value
 8.291.787.55
Price/Sales
 9.671.253.88
Price/Cash Flow
 19.394.3797.42
Price/Earnings
META
VZ
SNAP

Financial Strength

Metric
META
VZ
SNAP
Quick Ratio
 2.550.514.25
Current Ratio
 2.670.694.39
Interest Coverage
 103.674.01−65.42
Quick Ratio
META
VZ
SNAP

Profitability

Metric
META
VZ
SNAP
Return on Assets (Normalized)
 25.74%4.66%1.83%
Return on Equity (Normalized)
 38.69%18.99%5.73%
Return on Invested Capital (Normalized)
 30.60%7.89%0.42%
Return on Assets
META
VZ
SNAP
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Internet Content & Information Industry Comparables

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TCEHY
Tencent Holdings Ltd ADRTgsbqbzhhqTdn$413.8 Bil
SPOT
Spotify Technology SAKnvjvfwTrk$60.2 Bil
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DoorDash Inc Ordinary Shares - Class ATjjlnhmzGfdvtm$51.2 Bil
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Baidu Inc ADRGhbsrbyrBwmxb$33.6 Bil
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Pinterest Inc Class AVrtzfntJvpwmhp$22.4 Bil
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Tencent Music Entertainment Group ADRFqvvxychNyfkv$21.8 Bil
SNAP
Snap Inc Class AKbdvkqhWppz$18.3 Bil

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