Meta Platforms: META // Blue 1 // Strike Price = $180
NOTE: You can have the Strike Price on this one. We encourage you to also come up with a buy price. Let’s compare!
- 10 year CAGR = 25.3% (May 20, 2013 to 2023 || $26 -> $245)
- 5 year CAGR = 5.9% (May 20, 2018 to 2023 || $184 -> $245)
- Future Growth Rate Estimate: 15%
- 5 year Price Target = $500 at a Price to Revenue multiple of 6
- sector median is 1.14 and META is 5.55 with a 5 year avg. of 7.8
- Price to Free Cash Flow / Share = 37.2 🤔
- Operating Margin = 28% 😀
- Return on Invested Capital = 15.9% 😀
- Long Term Debt to Total Assets = 5% 😀
- Cash & Equivalents to Total Operating Expense = 62.4% 🤔
// TL;DR
Zuck can emulate or purchase his way to a 15% future growth rate but he can’t innovate to a higher growth rate. Remember last year when he said he was going to spend $250B by 2030 on the metaverse. Hahaha. (Tesla only spent $25B to build the Model 3.) If you buy now you are FOMOing into the stock. You had your chance from July 2022 until Jan 2023 to buy with a Margin of Safety. If for some reason you like Zuck and want to invest in his misadventures, await his or the markets next folly. Investors do seem to like his advertising model so when the stock falters it is likely to mean revert fairly quickly.
// WHY BUY
AI, okay. Metaverse, perhaps one day. Oculus, cool once, stupid the second time. Facebook, nah, its zest and zeal has withered. Whats App, whatever. Instagram, yes, a picture is worth a thousand words. Stock buybacks, nice but nominal interest. Advertising, yeah i guess they are good at that, but it’s an industry that is a lot less than inspiring (ex Super bowl ads) for most of us, even if it is a big money biz. Zuck, see above photos. Oy vey. He buys & copies ideas instead of innovates. But I suppose you could say he is exceptionally good at that seeing as his net worth is $86B.
// ChatGPT: WHY BUY
Meta Platforms, formerly known as Facebook, is a social media platform that allows users to connect with friends, family, and businesses around the world. It offers a range of features such as messaging, posting updates, sharing photos and videos, and more. If you enjoy using social media and want to stay connected with others, Meta Platforms can be a great tool for you.
// CONCLUSION
If you want to be compensated by the Zuck Empire for all the personal info they have sucked out of you in order to show you generally useless ads while you pseudo-connect with your high school frenemies or try to be an Insta-influencer, then you might want to own this stock. Their days of vast growth are gone and expecting more than a 15% future growth rate is likely wishful thinking. Don’t FOMO into it now, but if there is an event (company specific or macro) that brings the stock price below Strike, it’s not a bad bet because it will likely mean revert fairly quickly.
// CATALYSTS
AI. Metaverse. Twitter competitor. Acquisitions?
// RISKS
Zuck. Tiktok, etc. Ad biz-model rebellion by the masses … or a more masses-friendly biz model that enables all creators to be compensated for their contributions/eyeball time.
// NEWS & COMMENTS
May 18, 2023
SA // buy: Can Meta Platforms Stock Reach $300 In 2023?
“Despite having to deal with several challenges including the threat of competition and poor macroeconomic conditions, Meta Platforms is well-positioned to thrive in the long term. At a forward P/E of 21, I believe the company is valued more like a mature company with steady growth ahead, and less like a company that is poised to grow in double digits annually in the foreseeable future. META stock remains attractive despite the recent run, and I will add to my long position if the market presents an opportunity to buy the stock again around the $200 level.”
// GGI 💬
Yup.
