This short-term pessimism can be a blessing in disguise for long-term investors: Meta Platforms Inc (NASDAQ: FB )
Meta Platforms Inc. (NASDAQ: FB) is the world’s largest online social network, with 2.5 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue. Meta refers to this as Facebook Watch. 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 50% coming from the U.S. and Canada and 25% from Europe. With gross margins above 80%, Meta operates at a 30%-plus margin.
Highlights:
Meta Platforms saw its stock market value slump by more than $230bn on 10th February 2021, in a record daily loss for a US firm, after the social media giant issued a dismal forecast, blaming Apple Inc’s privacy changes and increased competition. Its shares fell by 26.4%. Meta also said that Facebook’s daily active users (DAUs) had dropped for the first time in its 18-year history.
Over the last six months, Meta’s stock has lost more than 40% after setting an all-time high in September. However, most of the decline came after Meta reported fourth-quarter earnings on Feb. 2: a drop of more than 30% in less than a week. Meta is going all-in on the metaverse and will be spending heavily, which cuts profits — something Wall Street hates. This short-term pessimism can be a blessing in disguise for long-term investors
| Exchange | NASDAQ-GS |
| Sector | Technology |
| Industry | Internet and Information Services |
| 1 Year Target | $350.00 |
| Share Volume | 46,156,943 |
| Average Volume | 30,666,346 |
| 52 Week High/Low | $384.33/$216.15 |
| Market Cap | 597,602,357,318 |
| P/E Ratio | 15.91 |
| Forward P/E 1 Yr. | 16.98 |
| EPS | $13.80 |
| Beta | 1.28 |
Meta will be heavily investing in growth this year, as expenses are expected to tally between $90 and $95 billion — a 30% increase on 2021’s expenses. Becoming the Metaverse leader isn’t going to be cheap, but Meta Platforms is going all-in.
Quick look at 2021 Revenue.
| Quarterly Ending: | 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 |
| Total Revenue | $33,671,000 | $29,010,000 | $29,077,000 | $26,171,000 |
| Cost of Revenue | $6,348,000 | $5,771,000 | $5,399,000 | $5,131,000 |
| Gross Profit | $27,323,000 | $23,239,000 | $23,678,000 | $21,040,000 |
Last 4 Quarters company has been reporting higher EPS than estimated. Quick look at 2022 EPS estimations.
Quick Look at Company’s Key data
1 Year Stock Chart
Risk Factors:
Growing competition from Rival Company such as TikTok, YouTube posts potential threat to company’s growth. Facebook may be forced to respond to Microsoft’s acquisition of Activision in gaming domain
Stock Recommendation: Company has shown consistent revenue growth & both on technical & Fundamental grounds this can be good investment for long term investors. MarketFacts gives a “Buy” rating on the stock at the closing Price of $219.55 as of February 11th, 2022.
| CMP (USD) (11th Feb 2022) | $219.55 |
| Target Price (CAD) | $295.00 |
| Recommendation | Buy |
