Meta-Platforms-One-Pager.1

Company: Meta Platforms, Inc.
Ticker: META Industry: Communication Services

Price: $143 Sub Industry: Interactive Media and Services
Target Price: $154.80 TTM P/E: 12.66X Beta: 1.16 Market Cap: $375B
Stop Loss: 25% Forward P/E: 18.35X Credit Rating: A1 (Moody’s) Avg. Vol. (12 M): 44,017,448
52 Week High/Low: $328.00/$88.09 EPS: 10.52 Rating Outlook: Stable Div. Yield: 0%
Company Background:
Meta Platforms, Inc. is a leading social media and technology company based in Menlo Park, California. The company has grown to
become one of the world's most popular and widely used platforms, with over 3.71 billion monthly active people as of 2021. The
company's flagship platform, Facebook, allows users to connect with friends and family, share photos, videos, and links, and join groups
and communities. Additionally, Meta Platforms owns and operates Instagram, WhatsApp, and Messenger which are also popular social
networking platforms. Meta Platforms uses these social media platforms to generate revenue through advertising. The company's
advertising platform allows businesses to target specific demographics and interests, making it a valuable tool for marketers. Additionally,
Meta Platforms’ virtual and augmented reality technology, such as the Oculus brand, and artificial intelligence is expected to play a
significant role in the company's future operations.
Industry Outlook:
The interactive media and services industry has experienced significant growth in recent years and is expected to continue to do so in the
future. The increasing penetration of internet-enabled devices, such as smartphones and tablets, and the growing popularity of social
media and video streaming platforms, have driven the expansion of this industry.
One major trend in the industry is the increasing use of virtual and augmented reality technology. This technology has the potential to
revolutionize the way we consume media and interact with each other, and companies in the interactive media and services industry are
investing heavily in its development. This technology is likely to be used in areas such as gaming, education, and healthcare, among
others.
Advertising and e-commerce are also a key area of growth for the industry. As the use of social media and other online platforms
continues to rise, businesses are increasingly turning to digital advertising to reach consumers. This is expected to drive growth in the
digital advertising market, which is expected to reach $1 trillion by 2025.
Investment Thesis:
Meta Platforms, Inc. is a well-established and financially strong company with a strong track record of growth. Its dominant position in the
social media market, along with its ownership of Instagram and WhatsApp, positions the company well for continued success.
Additionally, the company's advertising platform and virtual and augmented reality technology provide potential for future growth.
1. Leader in Digital Advertising
2. Oversold from Technology Sell-Off and Worries on Growth and Profitability
3. Opportunities in Extended Reality
4. Great Financial Health
Investment Risks:
 Increasing competition from incumbent firms and new entrants. This could reduce time spend on Meta Platforms’ social media
platforms leading to advertisers spending money elsewhere.
 Lack of diversification makes Meta Platforms is reliant on advertising spending. Advertising makes up 97.5% of Meta Platforms’
revenue.
 Regulatory risk from increasing restrictions on data collection to antitrust lawsuits makes Meta Platforms vulnerable to the
results of legal actions.
 Meta Platforms’ ambitious investments in Reality Labs could fail to yield the expected economic and strategic returns.
3-5 takeaways from last quarter investor call transcript:
 Meta Platforms’ social media platforms are strong and continue to grow. Reels has seen tremendous growth, which has helped
increase incremental time spend and engagement.
 Advertisers are having a difficult time, but continue to spend money on digital advertising.
 Artificial Intelligence and Machine Learning are high return on investments. Meta Platforms’ is going to continue to spend invest
and grow its capabilities until it determines there is no marginal benefit.
 Virtual Reality and Mixed Reality will continue to be developed as the firm tries to develop the next computing platform. The
release of the Meta Quest Pro and partnerships will help the company appeal toward businesses.
4-Year Financial Performance (Millions): Discounted Cash Flow Valuation:

2018 2019 2020 2021
Revenue $55,838 $70,697 $85,965 $117,929
Net Income $22,112 $18,485 $29,146 $39,370
NOPLAT $21,721 $17,870 $28,699 $38,928
Revenue Growth 37.35% 26.61% 21.60% 37.18%
%
EBIT % Margin 44.6% 41.0% 38.0% 39.6%
ROE 27.9% 20.0% 25.4% 31.1%
FCF $15,359 $21,212 $23,632 $39,116
Relative Valuation: Total Return %
META Comm. SPY ETF

Services
YTD +14.85% +11.15% +5.20%
1 Year -53.59% -25.73% -8.91%
5 Years -24.59% +7.01% +39.80%
Governance Disclosure Score 7.55

Social Disclosure Score: 3.16
Environmental Disclosure Score: 6.37

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Company: Meta Platforms, Inc.

Ticker: META Industry: Communication Services

4-Year Financial Performance (Millions): Discounted Cash Flow Valuation:

Relative Valuation: Total Return %

META Comm. SPY ETF

Governance Disclosure Score 7.55

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