At $504.73, Meta Platforms is severely undervalued.
For one, it’s trading with a price-to-earnings growth ratio (PEG) of just 0.35.
Two, its forward price-to-earnings multiple of 20 and its enterprise value-to-sales ratio of 7.6 do not fully reflect the company’s future growth or its powerful economic moat. In addition, Meta continues to compound its earnings and its free cash flow at such a fast rate that these multiples are ridiculously cheap. Plus, with $52.1 billion in free cash flow and $77.81 billion in liquidity, the stock still has plenty of upside opportunity.
META is also trading at just 22x earnings, which is attractive given Wall Street’s long-term growth estimate of about 17%.
Meta also has 3.35 billion daily active users across its platforms, which is a strong advertising magnet. With most of the planet using its family of apps, it generated $164 billion in revenue just last year. It’s also strongly investing in artificial intelligence, with its Meta AI assistant projected to reach about a billion users this year.
All of which should help push META higher again.
Sincerely,
Ian Cooper
Recent Comments