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Meta Platforms (META)
NASDAQ:META
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Meta Platforms
(NASDAQ:META)84Outperform
Positive Factors
AI-driven opportunities
META's tremendous AI-driven opportunities focus on personalized AI-driven functionality across its platform of apps that drive increasing user engagement, better content, and a more engaging experience.
Negative Factors
Competitive pressure
META faces serious competitive pressure from TikTok and user activity shifting to TikTok will have a detrimental impact to META’s revenue.
Operating losses
Operating losses increased by 18% y/y to USD4.4bn in 3Q24 and is expected to increase y/y due to the ongoing product development efforts in AR/VR and further scaling of the ecosystem.
Meta Platforms (META) vs. S&P 500 (SPY)
Market Cap
$1.69T
Dividend Yield0.3%
Average Volume (3M)16.77M
Price to Earnings (P/E)28.0
Beta (1Y)1.15
Revenue Growth21.94%
EPS Growth61.97%
CountryUS
Employees74,067
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)23.92
Shares Outstanding2,189,898,200
10 Day Avg. Volume15,882,102
30 Day Avg. Volume16,766,585
Financial Highlights & Ratios
PEG Ratio0.45
Price to Book (P/B)N/A
Price to Sales (P/S)10.09
Price to Cash Flow (P/CF)14.80
P/FCF Ratio14.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$764.61Price Target Upside19.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering48
Meta Platforms Business Overview & Revenue Model
Company DescriptionMeta Platforms, Inc. (META), formerly known as Facebook, Inc., is a technology company specializing in social media and digital advertising. Headquartered in Menlo Park, California, Meta operates some of the world’s most popular platforms, including Facebook, Instagram, WhatsApp, and Messenger. The company generates the majority of its revenue from advertising. Meta is also developing and advancing virtual and augmented reality technologies through its Reality Labs division.
How the Company Makes MoneyMeta Platforms primarily generates revenue through digital advertising across its suite of social media platforms, namely Facebook, Instagram, and Messenger. Advertisers pay to display ads to the vast user base on these platforms, leveraging Meta's sophisticated targeting capabilities driven by user data insights. Another revenue stream comes from its Reality Labs division, which sells virtual reality hardware such as Oculus VR headsets and other related technologies. Additionally, Meta earns from in-app purchases and services offered on its platforms, though this is a smaller portion of its overall revenue. The company's earnings are significantly influenced by its ability to attract and retain users, expand advertising opportunities, and innovate in immersive technologies.
Meta Platforms Financial Statement Overview
Summary
Meta Platforms showcases outstanding financial strength with significant revenue growth, solid profitability, and efficient cost management. The balance sheet is robust with low leverage and high equity, while cash flows demonstrate excellent liquidity and cash generation capabilities.Income Statement
Meta Platforms demonstrates strong financial performance with impressive growth. Revenue grew significantly over the years, with a notable 21.9% increase from 2023 to 2024. The gross profit margin is solid at 81.7% for 2024, showcasing efficient cost management. The net profit margin improved to 37.9% in 2024, indicating strong profitability. However, EBIT and EBITDA margins, both at 42.2% in 2024, show slight room for operational efficiency improvement.92
Very Positive
Balance Sheet
The company's balance sheet is robust with a low debt-to-equity ratio of 0.27, signifying low leverage and a strong equity position. The return on equity is impressive at 34.1% for 2024, reflecting effective equity utilization. The equity ratio is healthy at 66.2%, indicating a strong asset base funded by equity. Overall, the balance sheet reflects financial stability and low risk.89
Very Positive
Cash Flow
Meta Platforms exhibits strong cash flow health with significant free cash flow growth of 23.3% from 2023. The operating cash flow to net income ratio is robust at 1.46, indicating effective cash conversion. The free cash flow to net income ratio of 0.87 for 2024 demonstrates solid cash generation relative to earnings. The cash flow statement reflects excellent liquidity and cash management.95
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 164.50B | 134.90B | 116.61B | 117.93B | 85.97B | Gross Profit |
| 134.34B | 108.94B | 91.36B | 95.28B | 69.27B | EBIT |
| 69.38B | 46.75B | 33.55B | 46.75B | 32.67B | EBITDA |
| 86.88B | 59.05B | 42.24B | 54.72B | 39.53B | Net Income Common Stockholders |
| 62.36B | 39.10B | 23.20B | 39.37B | 29.15B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 77.81B | 65.40B | 40.74B | 48.00B | 61.95B | Total Assets |
| 276.05B | 229.62B | 185.73B | 165.99B | 159.32B | Total Debt |
| 49.06B | 37.23B | 26.59B | 13.87B | 10.65B | Net Debt |
| 5.17B | -4.63B | 11.91B | -2.73B | -6.92B | Total Liabilities |
| 93.42B | 76.45B | 60.01B | 41.11B | 31.03B | Stockholders Equity |
| 182.64B | 153.17B | 125.71B | 124.88B | 128.29B |
| Cash Flow | Free Cash Flow | |||
| 54.07B | 43.85B | 19.04B | 39.12B | 23.63B | Operating Cash Flow |
| 91.33B | 71.11B | 50.48B | 57.68B | 38.75B | Investing Cash Flow |
| -47.15B | -24.50B | -28.97B | -7.57B | -30.06B | Financing Cash Flow |
| -40.78B | -19.50B | -22.14B | -50.73B | -10.29B |
Meta Platforms Technical Analysis
Neutral
640.00
Price Trends
651.58
Negative
618.44
Positive
563.85
Positive
Market Momentum
-1.98
Positive
37.79
Neutral
22.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For META, the sentiment is Neutral. The current price of 640 is below the 20-day moving average (MA) of 694.14, below the 50-day MA of 651.58, and above the 200-day MA of 563.85, indicating a neutral trend. The MACD of -1.98 indicates Positive momentum. The RSI at 37.79 is Neutral, neither overbought nor oversold. The STOCH value of 22.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for META.
Meta Platforms Risk Analysis
Meta Platforms disclosed 48 risk factors in its most recent earnings report. Meta Platforms reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Meta Platforms Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $1.69T | 28.01 | 34.14% | 0.30% | 21.94% | 61.97% | |
82 Outperform | $2.16T | 36.91 | 20.72% | ― | 10.99% | 91.61% | |
79 Outperform | $25.08B | 13.15 | 39.19% | ― | 19.35% | ― | |
75 Outperform | $416.03B | 49.05 | 35.21% | ― | 15.28% | 65.72% | |
74 Outperform | $2.09T | 21.17 | 30.80% | 0.35% | 13.89% | 38.99% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
59 Neutral | $16.29B | ― | -28.48% | ― | 16.40% | 48.48% |
* Communication Services Sector Average
Performance Comparison
META
Meta Platforms
640.00
151.13
30.91%
AMZN
Amazon
203.80
29.68
17.05%
GOOGL
Alphabet Class A
170.92
38.73
29.30%
NFLX
Netflix
972.58
374.08
62.50%
SNAP
Snap
9.60
-1.83
-16.01%
PINS
Pinterest
35.20
-0.49
-1.37%
Meta Platforms Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: -5.39% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant revenue growth, strong performance in ad revenue, and user growth in Meta AI and Threads. However, there are notable challenges such as high operating losses in Reality Labs, increased infrastructure costs, and ongoing regulatory headwinds. Despite these challenges, the overall sentiment leans towards optimism due to robust financial performance and strategic growth areas.Highlights
Strong Revenue Growth
Q4 total revenue was $48.4 billion, up 21% year-over-year on both a reported and constant currency basis.
Operating Income and Margin
Fourth quarter operating income was $23.4 billion, representing a 48% operating margin.
Ad Revenue Increase
Q4 Family of Apps ad revenue was $46.8 billion, up 21% year-over-year.
Meta AI User Growth
Meta AI usage continues to scale, with more than 700 million monthly actives.
Threads User Growth
Threads now has more than 320 million monthly actives, adding more than 1 million sign-ups per day.
Meta AI Glasses Popularity
Ray-Ban Meta AI glasses are a real hit, indicating positive consumer reception.
Lowlights
Reality Labs Financial Loss
Reality Labs operating loss was $5 billion in Q4.
High Infrastructure Costs
Cost of revenue increased 15%, driven mostly by higher infrastructure costs.
Regulatory and Legal Headwinds
Monitoring an active regulatory landscape, including legal and regulatory headwinds in the EU and the U.S. that could significantly impact the business.
High Capital Expenditures
Full-year 2025 capital expenditures are expected to be in the range of $60 billion to $65 billion.
Company Guidance
During Meta's fourth quarter and full-year 2024 earnings call, several key metrics and guidance for the upcoming year were highlighted. The company reported a Q4 total revenue of $48.4 billion, marking a 21% increase year-over-year, with total expenses at $25 billion, up 5%. Meta's operating income was $23.4 billion with a 48% operating margin, and net income reached $20.8 billion. The company ended the year with $77.8 billion in cash and marketable securities. Meta's daily user engagement surged, with over 3.3 billion people using at least one app daily. The company expects 2025 revenue to reach between $39.5 billion and $41.8 billion in Q1, with full-year expenses projected between $114 billion and $119 billion. Capital expenditures for 2025 are anticipated to be in the range of $60 billion to $65 billion, driven by investments in generative AI, core business infrastructure, and an increase in technical talent hiring. Meta aims to expand its AI capabilities, planning to scale its Meta AI usage which already boasts over 700 million monthly active users, and continues to innovate with products such as AI-powered Ray-Ban glasses and the Llama 4 AI model. The company is also focused on enhancing monetization efficiency, with initiatives like Advantage+ shopping campaigns contributing to a $20 billion annual revenue run-rate.Meta Platforms Corporate Events
Executive/Board Changes
Meta Platforms Increases Executive Bonus Targets for 2025
Neutral
Feb 20, 2025
On February 13, 2025, Meta Platforms’ Compensation, Nominating & Governance Committee approved an increase in the target bonus percentage for its named executive officers, excluding the CEO, under its Bonus Plan. This change, effective for the 2025 performance period, aims to align their compensation with the 50th percentile of the peer group, addressing previous positioning at or below the 15th percentile.
Executive/Board ChangesBusiness Operations and Strategy
Meta Expands Board with New Strategic Appointments
Positive
Jan 6, 2025
Meta Platforms has expanded its Board of Directors to thirteen members with the addition of Dana White, John Elkann, and Charlie Songhurst, effective December 30, 2024. The company believes the new board members will bring valuable expertise and perspectives to help navigate opportunities in AI, wearables, and social technology. This strategic move highlights Meta’s commitment to strengthening its leadership as it continues to innovate and shape the future of human connection.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.