I was wrong about Meta stock (July 2023)
- 8 months ago
Should you buy Meta stock?
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About 9 months ago I released a video on Meta criticizing the company’s brand and cost control and I gave the stock a neutral rating.
Turns out I couldn’t have been more wrong. Since that video, the stock has rallied over 100% and it's almost back to the level it was when the company changed its name from Facebook.
At the latest share price, the company has a valuation of 810 billion. It’s got 54 billion of cash and investments and 18.4 billion of long term debt so the enterprise value is 775 billion.
Taking into account the latest quarter, revenue over the last 12 months is 121 billion, Net income is 22.5 billion and free cash flow is 24.1 billion. That means the stock is now valued at 6.4 times revenue, 36 times earnings and 32 times free cash flow.
The turnaround in Meta’s valuation can be explained by Mark Zuckerberg getting real about the company’s position. Zuckerberg has got to work cutting costs and doubling down on the things that have previously made Meta such a success.
Headcount at Meta was cut by 14% and capital expenditure decreased by 18%. The company rolled out a new platform Threads, started monetising WhatsApp business users and its Advantage ads program is delivering significantly more value to advertisers. In addition, the company bought back 793 million dollars of stock.
As a result of all this, Meta’s numbers increased across the board. Revenue was up 11%, net income was up 16% and daily active users were up 7% to 3.07 billion.
#metastock #stockmarket #investing #stocks
Join 9000+ investors: https://www.overlookedalpha.com
About 9 months ago I released a video on Meta criticizing the company’s brand and cost control and I gave the stock a neutral rating.
Turns out I couldn’t have been more wrong. Since that video, the stock has rallied over 100% and it's almost back to the level it was when the company changed its name from Facebook.
At the latest share price, the company has a valuation of 810 billion. It’s got 54 billion of cash and investments and 18.4 billion of long term debt so the enterprise value is 775 billion.
Taking into account the latest quarter, revenue over the last 12 months is 121 billion, Net income is 22.5 billion and free cash flow is 24.1 billion. That means the stock is now valued at 6.4 times revenue, 36 times earnings and 32 times free cash flow.
The turnaround in Meta’s valuation can be explained by Mark Zuckerberg getting real about the company’s position. Zuckerberg has got to work cutting costs and doubling down on the things that have previously made Meta such a success.
Headcount at Meta was cut by 14% and capital expenditure decreased by 18%. The company rolled out a new platform Threads, started monetising WhatsApp business users and its Advantage ads program is delivering significantly more value to advertisers. In addition, the company bought back 793 million dollars of stock.
As a result of all this, Meta’s numbers increased across the board. Revenue was up 11%, net income was up 16% and daily active users were up 7% to 3.07 billion.
#metastock #stockmarket #investing #stocks