Meta Platforms (NasdaqGS:META) - Share price, News & Analysis

Q: What is the Fair Price of META when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

META ($170.16) is trading below our estimate of [[fair value]] ($535.8)

META fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	3/6
Past Performance	4/6
Financial Health	6/6
Dividends	0/6

META Stock Overview

Rewards

Trading at 68.2% below our estimate of its fair value

Earnings are forecast to grow 13.61% per year

Earnings grew by 10.7% over the past year

Risk Analysis

Significant insider selling over the past 3 months

Meta Platforms Competitors

Amazon.com

NasdaqGS:AMZN

US$1.2t

Alphabet

NasdaqGS:GOOGL

US$1.6t

Microsoft

NasdaqGS:MSFT

US$2.0t

Apple

NasdaqGS:AAPL

US$2.3t

Price History & Performance

Summary of all time highs, changes and price drops for Meta Platforms
Historical stock prices
Current Share Price	US$169.49
52 Week High	US$384.33
52 Week Low	US$154.25
Beta	1.38
1 Month Change	-13.14%
3 Month Change	-26.26%
1 Year Change	-52.34%
3 Year Change	-12.18%
5 Year Change	14.19%
Change since IPO	343.32%

Recent News & Updates

Jun 27

Even After a Slump in Expected Earnings, Meta Platforms (NASDAQ:META) may Still be Cheap Relative to Industry Peers

Meta Platforms, Inc. (NASDAQ:META) finally changed its ticker as part of the final transformation step to a company dedicated to the development of the metaverse. While it is exciting to see how the virtual reality project pans out, today, we will focus on the money making capacity of Meta.

Jun 27

Meta Platforms' Shares Offer The Bargain Of The Century

Shares of the company formerly known as Facebook, Meta Platforms are attractive. At ~12.3x times expected 2023 consensus earnings, shares offer the bargain of the century, in our view. We don't think the market is giving Meta enough credit for the sustainable growth behind its diversified advertising business model. Top-line growth ensues as the company builds out the metaverse. Meta hauled in over $39 billion in free cash flow during 2021, and it ended the year with an incredible net cash position of nearly $48 billion, excluding equity investments. The most popular technology gift over the holidays was Meta's virtual reality headset, and clearly, Zuckerberg is on to something, and we're giving him zero credit for the metaverse in our fair value estimate, which stands at more than double the last closing price. Facebook and Instagram may become the "new Internet", and we expect that e-commerce (Shops) and payments technology could offer huge upside potential at Meta, both in and out of the metaverse.

Jun 19

Meta: This Is More Important Than The Metaverse

It will take years before Meta’s investments in the metaverse start to generate meaningful returns. In the meantime, investors should focus on Meta’s core business, which is digital advertising. Despite all the challenges that the company faces, at the current valuation the risk of owning META stock is lower than even a few months ago.

Jun 13

Down Nearly 50% This Year, Is Meta Platforms Stock Now A Buy Or Sell?

META stock is barely positive after three years while TCEHY is up 14% and BIDU is up 28%, even as naysayers claim there’s always something to fear about Chinese stocks. Leadership exodus, advertising headwinds, and regulatory scrutiny are driving bearish sentiment for the Facebook owner. From being the second-most expensive FANG/MANA stock on P/FCF five years ago to the cheapest currently, there may be a limited downside to expect from META stock. META remains a consensus ‘Buy’ with a score of 4.27, lower than AMZN, GOOG, BABA, and BIDU. The latter two were just months ago deemed “uninvestable” by Wall Street. I see parallels with Sea Limited where the gaming company poured money into growing its e-commerce arm, much like META is doing with its metaverse project. Hordes of shareholders, including Cathie Wood's ARK Invest have been selling SE stock in recent months.

Shareholder Returns

	META	US Interactive Media and Services	US Market
7D	3.5%	6.8%	6.6%
1Y	-52.3%	-44.8%	-18.4%

Return vs Industry: META underperformed the US Interactive Media and Services industry which returned -44.8% over the past year.

Return vs Market: META underperformed the US Market which returned -18.4% over the past year.

Price Volatility

Is META's price volatile compared to industry and market?
META volatility
META Average Weekly Movement	9.4%
Interactive Media and Services Industry Average Movement	11.3%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.6%
10% least volatile stocks in US Market	3.2%

Stable Share Price: META is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: META's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2004	77,805	Mark Zuckerberg	https://investor.fb.com

Meta Platforms, Inc. develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, wearables, and in-home devices worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment’s products include Facebook, which enables people to share, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices through chat, audio and video calls, and rooms; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately.

Meta Platforms Fundamentals Summary

How do Meta Platforms's earnings and revenue compare to its market cap?
META fundamental statistics
Market Cap	US$475.87b
Earnings (TTM)	US$37.34b
Revenue (TTM)	US$119.67b

12.7x

P/E Ratio

4.0x

P/S Ratio

Is META overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
META income statement (TTM)
Revenue	US$119.67b
Cost of Revenue	US$23.52b
Gross Profit	US$96.14b
Other Expenses	US$58.81b
Earnings	US$37.34b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	13.35
Gross Margin	80.34%
Net Profit Margin	31.20%
Debt/Equity Ratio	0%

How did META perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is META undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for META?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for META. This is calculated by dividing META's market cap by their current preferred multiple.
What is META's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$475.87b

META key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.7x
Enterprise Value/EBITDA	8.6x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

How does META's PE Ratio compare to its peers?

META PE Ratio vs Peers

The above table shows the PE ratio for META vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	31.1x
AMZN Amazon.com	55.3x	45.1%	US$1.2t
GOOGL Alphabet	20.8x	14.1%	US$1.6t
MSFT Microsoft	27.6x	11.8%	US$2.0t
AAPL Apple	22.5x	3.6%	US$2.3t
META Meta Platforms	12.7x	13.6%	US$475.9b

Forward PE

Price-To-Earnings vs Peers: META is good value based on its Price-To-Earnings Ratio (12.7x) compared to the peer average (31.6x).

Price to Earnings Ratio vs Industry

How does META's PE Ratio compare vs other companies in the US Interactive Media and Services Industry?

Price-To-Earnings vs Industry: META is good value based on its Price-To-Earnings Ratio (12.7x) compared to the US Interactive Media and Services industry average (45.5x)

Price to Earnings Ratio vs Fair Ratio

What is META's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

META PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.7x
Fair PE Ratio	37.2x

Price-To-Earnings vs Fair Ratio: META is good value based on its Price-To-Earnings Ratio (12.7x) compared to the estimated Fair Price-To-Earnings Ratio (37.2x).

Share Price vs Fair Value

What is the Fair Price of META when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: META ($170.16) is trading below our estimate of fair value ($535.8)

Significantly Below Fair Value: META is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: META is good value based on its PEG Ratio (0.9x)

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Future Growth

How is Meta Platforms forecast to perform in the next 1 to 3 years based on estimates from 50 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

13.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: META's forecast earnings growth (13.6% per year) is above the savings rate (1.9%).

Earnings vs Market: META's earnings (13.6% per year) are forecast to grow slower than the US market (13.9% per year).

High Growth Earnings: META's earnings are forecast to grow, but not significantly.

Revenue vs Market: META's revenue (12.7% per year) is forecast to grow faster than the US market (8.4% per year).

High Growth Revenue: META's revenue (12.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: META's Return on Equity is forecast to be high in 3 years time (22.2%)

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Past Performance

How has Meta Platforms performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

22.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: META has high quality earnings.

Growing Profit Margin: META's current net profit margins (31.2%) are lower than last year (35.7%).

Past Earnings Growth Analysis

Earnings Trend: META's earnings have grown significantly by 22.7% per year over the past 5 years.

Accelerating Growth: META's earnings growth over the past year (10.7%) is below its 5-year average (22.7% per year).

Earnings vs Industry: META earnings growth over the past year (10.7%) exceeded the Interactive Media and Services industry -37.6%.

Return on Equity

High ROE: META's Return on Equity (30.3%) is considered high.

Discover strong past performing companies

Financial Health

How is Meta Platforms's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: META's short term assets ($59.3B) exceed its short term liabilities ($21.1B).

Long Term Liabilities: META's short term assets ($59.3B) exceed its long term liabilities ($19.9B).

Debt to Equity History and Analysis

Debt Level: META is debt free.

Reducing Debt: META had no debt 5 years ago.

Debt Coverage: META has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: META has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Meta Platforms's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate META's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate META's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if META's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if META's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as META has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.4yrs

Average management tenure

CEO

Mark Zuckerberg (37 yo)

17.92yrs

Tenure

US$26,823,061

Compensation

Mr. Mark Elliot Zuckerberg founded Meta Platforms, Inc. (formerly known as Facebook, Inc.) in 2004 and its Chief Executive Officer since July 2004 and Chairman since January 2012. Mr. Zuckerberg is respons...

CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD26.82M) is above average for companies of similar size in the US market ($USD13.44M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: META's management team is seasoned and experienced (5.4 years average tenure).

Board Members

Experienced Board: META's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: META insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31