10Y annualized return is
excellent
at 21.3% per year
META has met or exceeded earnings expectations in
most
recent quarters (9/10)
Reasonable P/E Ratio
Strong Gross Profit Margin
High Return on Equity
Strong Operating Profit Margin
Strong Liquidity Ratios
Low Debt Levels
📈 Strong User Base
💡 Leading in AI Development
📊 Strong Financial Performance
🚀 Innovations in AI and Hardware
📅 Strategic Focus on Engagement
High Price-to-Sales Ratio
Elevated P/FCF Ratio
Low Dividend Yield
High EV/EBITDA Ratio
⚖️ High Capital Expenditure
🔍 Uncertain Monetization of New Features
Overall, Meta Platforms demonstrates strong business quality through its vast user base and innovative investments in AI, albeit with high capital expenditures that may pose risks. Future prospects appear promising, particularly with ongoing AI advancements and engagement strategies, although monetization remains a challenge.
Analysis Date: January 29, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Meta Platforms, Inc. is a company that helps people connect and share with each other using various apps and technologies. Its main products include Facebook, where you can share updates and photos with friends; Instagram, which focuses on sharing pictures and videos; Messenger and WhatsApp, which are apps for messaging and making calls. Additionally, Meta is working on virtual and augmented reality products, which allow people to experience new ways of connecting and interacting, even from far away.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Consumer
Competitive Advantages
Key Business Risks
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Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$947.46
Current Market Price: $504.66
IV/P Ratio: 1.88x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
47.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for META
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (20.51)
P/B ratio ≤ 1.5 (7.00)
Current ratio ≥ 2.0 (2.98x)
Long-term debt < Net current assets (0.71x)
Margin of safety (47.0%)
META does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
38.17%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
81.66%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
37.91%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
META's return on equity (ROE) of 38.17% indicates effective management in generating profit from shareholders' equity.
An operating profit margin of 42.18% shows that META efficiently controls its operating expenses relative to revenue.
The dividend yield of 0.23% indicates that META returns a minimal amount of profits to shareholders in the form of dividends.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.27x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.98x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
With a current ratio of 2.98 and a quick ratio of 2.98, META is well-positioned to meet its short-term obligations.
A debt-to-equity ratio of 0.27 suggests that META maintains a conservative approach to leverage and has a strong balance sheet.
An EV/EBITDA ratio of 20.12 may indicate that META is overvalued relative to its earnings before interest, taxes, depreciation, and amortization.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Meta has over 3.3 billion daily users across its apps, indicating a massive and engaged audience that provides a competitive advantage and a solid revenue base.
Meta is investing heavily in AI, with the expectation that its personalized AI assistant will reach over 1 billion users this year, establishing a long-term competitive advantage.
The company reported a Q4 revenue of $48.4 billion, up 21% year-over-year, showcasing robust growth amid increasing ad revenue and lower expenses in certain areas.
The company anticipates significant capital expenditures in 2025, ranging from $60 billion to $65 billion, indicating high ongoing costs that could strain financials if not managed effectively.
Meta's development of Llama 4 and custom silicon aims to enhance AI capabilities and efficiency, which could lead to new revenue opportunities and improved user engagement.
Meta is making targeted investments in enhancing user engagement across its platforms, particularly through features that facilitate creator discovery and video content, which can drive advertising revenue growth.
While Meta AI has significant user engagement, the pathway to monetization remains unclear, with a focus on user experience first, potentially delaying revenue contributions.