Meta Platforms, Inc. (NASDAQ: META)

Sector: Communication Services Industry: Internet Content & Information CIK: 0001326801
Market Cap 1,747.49 Bn
P/B 15.82
P/E 74.30
P/S 23.25
ROIC (Qtr) 4.18
Div Yield % 0.09
Rev 1y % (Qtr) 26.25
Total Debt (Qtr) 51.06 Bn
Debt/Equity (Qtr) 0.26

About

Meta Platforms, Inc., commonly known as Meta, is a technology company that operates a variety of social media platforms such as Facebook, Instagram, and WhatsApp. With the stock symbol META, the company's mission is to "give people the power to build community and bring the world closer together." The company's products and services are designed to connect people, enable them to share and discover content, and provide opportunities for businesses to reach their target audiences. Meta's primary business activities involve operating social media...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 107.57B provides robust 2.11x coverage of total debt 51.06B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 10.19B provide 4.82x coverage of short-term debt 2.11B, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 282.69B provides 5.54x coverage of total debt 51.06B, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 107.57B provides 5.11x coverage of SG&A expenses 21.04B, showing efficient operational cost management.
  • Robust tangible asset base of 282.69B provides 7.82x coverage of working capital 36.16B, indicating strong operational backing.

Bear case

  • Operating cash flow of 107.57B barely covers its investment activities of (89.31B), with a coverage ratio of -1.20, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 107.57B provides thin coverage of dividend payments of (5.26B) with a -20.47 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (89.31B) provide weak support for R&D spending of 52.42B, which is -1.70x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 10.19B provide limited coverage of acquisition spending of (2.62B), which is -3.89x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Short-term investments of 34.26B significantly exceed cash reserves of 10.19B, which is 3.36x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.

Geographical Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Internet Content & Information
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GOOGL Alphabet Inc. 4,538.16 Bn 131.46 27.23 33.71 Bn
2 META Meta Platforms, Inc. 1,747.49 Bn 74.30 23.25 51.06 Bn
3 SPOT Spotify Technology S.A. 103.00 Bn 62.32 5.18 2.57 Bn
4 BIDU Baidu, Inc. 62.73 Bn 49.63 3.42 13.66 Bn
5 RDDT Reddit, Inc. 32.18 Bn 92.16 16.90 0.03 Bn
6 NBIS Nebius Group N.V. 27.81 Bn 127.53 81.80 4.51 Bn
7 TME Tencent Music Entertainment Group 24.66 Bn 15.77 5.54 0.54 Bn
8 PINS Pinterest, Inc. 16.95 Bn 8.53 4.18 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.71 1.10
EV to Cash from Ops. EV/CFO 52.13 -3.08
EV to Debt EV to Debt 33.96 28.98
EV to EBIT EV/EBIT 60.87 -26.54
EV to EBITDA EV/EBITDA 50.88 9.30
EV to Free Cash Flow [EV/FCF] EV/FCF 92.13 -67.01
EV to Market Cap EV to Market Cap 0.99 0.90
EV to Revenue EV/Rev 23.07 61.25
Price to Book Value [P/B] P/B 15.82 1.56
Price to Earnings [P/E] P/E 74.30 2.92
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 11.14 0.33
Dividend Payout Ratio % Div Payout % (Qtr) 8.90 -8.92
Dividend per Basic Share Div per Share (Qtr) 2.08 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 11.65 2.58
Interest Coverage Int. cover (Qtr) 0.00 -202.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -106.20 -24.06
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -76.77 175.36
Dividend Growth (1y) % Div 1y % (Qtr) 38.33 0.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 5.38 31.53
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 29.96 -472.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 31.62 32.66
EBT Growth (1y) % EBT 1y % (Qtr) 31.62 -25.80
EPS Growth (1y) % EPS 1y % (Qtr) 6.23 -18.36
FCF Growth (1y) % FCF 1y % (Qtr) -14.30 20.83
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 22.12 19.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.62 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.02
Cash Ratio Cash Ratio (Qtr) 0.28 1.54
Current Ratio Curr Ratio (Qtr) 1.98 3.38
Debt to Equity Ratio Debt/Equity (Qtr) 0.26 -0.39
Interest Cover Ratio Int Coverage (Qtr) 0.00 -202.56
Times Interest Earned Times Interest Earned (Qtr) 0.00 -202.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 53.70 -4,283.87
EBIT Margin % EBIT Margin % (Qtr) 44.41 -4,786.62
EBT Margin % EBT Margin % (Qtr) 44.41 -5,002.12
Gross Margin % Gross Margin % (Qtr) 82.00 58.65
Net Profit Margin % Net Margin % (Qtr) 30.90 -5,003.08