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Meta Platforms Inc Class A META

Morningstar Rating
$481.74 −2.29 (0.47%)
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Company Report

Meta Earnings: Wide-Moat Meta Surpassed Expectations Again, but the Shares Are Overvalued

We are increasing our Meta fair value estimate significantly to $400 from $322, as we are more optimistic about its profit margin expansion. Meta’s fourth-quarter results showed strong network effects, which attracted more users and increased engagement while allowing it to sell more ads at higher prices with lower user and advertiser acquisition costs, impressively expanding margins. We also commend Meta for instituting a dividend alongside share buybacks.

Price vs Fair Value

META is trading at a 20% premium.
Price
$481.74
Fair Value
$363.00
Uncertainty
High
1-Star Price
$796.00
5-Star Price
$997.00
Economic Moat
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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

Trading Information

Previous Close Price
$484.03
Day Range
$480.60486.14
52-Week Range
$169.06494.36
Bid/Ask
$481.37 / $481.84
Market Cap
$1.23 Tril
Volume/Avg
25,489 / 18.1 Mil

Key Statistics

Price/Earnings (Normalized)
29.50
Price/Sales
9.22
Dividend Yield (Trailing)
0.10%
Dividend Yield (Forward)
0.42%
Total Yield
1.71%

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 U.S. and Canada and over 20% from Europe.
Sector
Communication Services
Industry
Internet Content & Information
Stock Style Box
Large Growth
Total Number of Employees
67,317

Competitors

Valuation

Metric
META
SNAP
GOOGL
Price/Earnings (Normalized)
29.5012.7824.78
Price/Book Value
7.917.776.42
Price/Sales
9.223.996.04
Price/Cash Flow
18.49100.2417.58
Price/Earnings
META
SNAP
GOOGL

Financial Strength

Metric
META
SNAP
GOOGL
Quick Ratio
2.554.251.94
Current Ratio
2.674.392.10
Interest Coverage
103.67−65.42266.75
Quick Ratio
META
SNAP
GOOGL

Profitability

Metric
META
SNAP
GOOGL
Return on Assets (Normalized)
25.74%1.83%24.48%
Return on Equity (Normalized)
38.69%5.73%35.00%
Return on Invested Capital (Normalized)
30.60%0.42%30.54%
Return on Assets
META
SNAP
GOOGL
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Internet Content & Information Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
GOOGL
Alphabet Inc Class ADtbjl$1.7 Tril
GOOG
Alphabet Inc Class CWmdy$1.7 Tril
TCEHY
Tencent Holdings Ltd ADRYjt$346.2 Bil
SPOT
Spotify Technology SAFhxq$50.3 Bil
DASH
DoorDash Inc Ordinary Shares - Class AWtykm$48.4 Bil
BIDU
Baidu Inc ADRLspw$38.4 Bil
PINS
Pinterest Inc Class ASmwbsv$24.0 Bil
TME
Tencent Music Entertainment Group ADRJwzqq$17.9 Bil
SNAP
Snap Inc Class AKvbf$17.7 Bil

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