Should you buy Meta stock? (May 2023)
- 7 months ago
Meta stock analysis. META.
Visit our website for more: https://www.overlookedalpha.com
Meta currently has a market cap of 617 billion dollars. It’s got 11.6 billion of cash on the balance sheet and 10 billion of debt so the enterprise value is 615 billion.
Over the last 12 months, the company has made 117 billion dollars of revenue, 21 billion of net income and 17.6 billion of free cash flow. That means the stock is valued at 5 times revenue, 29 times earnings or 35 times free cash flow.
Those multiples are not cheap, especially when you consider stalling growth. Q1 revenue increased by only 3% and net income fell by 24%.
On the plus side, daily active people increased 5% to 3.02 billion so bulls say the company has plenty of levers to pull.
Looking at the stock chart, Meta is a great example of a company that in a short period of time changed priorities multiple times, all thanks to Mark Zuckerberg’s vision.
Meta has dual-class shares, and due to this structure, Mark owns almost 60% of the voting rights, despite owning a lot less of the company.
This gives him the ability to exercise significant influence in which direction the company is going.
After introducing the metaverse, and changing the company name from to Meta, a lot of uncertainty arose.
The company started investing tens of billions into a new segment called Reality Labs.
The shareholders weren’t comfortable with this decision and the share price declined by 75%.
Sentiment changed significantly and Meta was no longer seen as a company with a strong portfolio of cash-generating apps. Instead, it was seen as a company taking risky bets.
Although Zuckerberg has the majority of the voting rights, this could not be ignored and Meta had to make a change. Instead of going all in on the metaverse, the focus shifted to improving operating efficiency, which also resulted in reducing the number of employees.
This decision, was welcomed by the market, the sentiment changed again, and the share price has since increased by over 160% to $240 in less than 6 months.
#metastock #stocks #investing #stockmarket
Visit our website for more: https://www.overlookedalpha.com
Meta currently has a market cap of 617 billion dollars. It’s got 11.6 billion of cash on the balance sheet and 10 billion of debt so the enterprise value is 615 billion.
Over the last 12 months, the company has made 117 billion dollars of revenue, 21 billion of net income and 17.6 billion of free cash flow. That means the stock is valued at 5 times revenue, 29 times earnings or 35 times free cash flow.
Those multiples are not cheap, especially when you consider stalling growth. Q1 revenue increased by only 3% and net income fell by 24%.
On the plus side, daily active people increased 5% to 3.02 billion so bulls say the company has plenty of levers to pull.
Looking at the stock chart, Meta is a great example of a company that in a short period of time changed priorities multiple times, all thanks to Mark Zuckerberg’s vision.
Meta has dual-class shares, and due to this structure, Mark owns almost 60% of the voting rights, despite owning a lot less of the company.
This gives him the ability to exercise significant influence in which direction the company is going.
After introducing the metaverse, and changing the company name from to Meta, a lot of uncertainty arose.
The company started investing tens of billions into a new segment called Reality Labs.
The shareholders weren’t comfortable with this decision and the share price declined by 75%.
Sentiment changed significantly and Meta was no longer seen as a company with a strong portfolio of cash-generating apps. Instead, it was seen as a company taking risky bets.
Although Zuckerberg has the majority of the voting rights, this could not be ignored and Meta had to make a change. Instead of going all in on the metaverse, the focus shifted to improving operating efficiency, which also resulted in reducing the number of employees.
This decision, was welcomed by the market, the sentiment changed again, and the share price has since increased by over 160% to $240 in less than 6 months.
#metastock #stocks #investing #stockmarket