As part of our ongoing series here at The Acquirer’s Multiple, we provide this feature article titled ‘Stock in Focus‘ where we focus on one of the stocks from our Stock Screeners.
One of the cheapest stocks in our Stock Screeners is:
Meta Platforms Inc (META)
Meta is the world’s largest online social network, with 2.5 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue. Meta refers to this as Facebook Watch. The firm’s ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the firm’s total revenue, with 50% coming from the U.S. and Canada and 25% from Europe. With gross margins above 80%, Meta operates at a 30%-plus margin.
A quick look at the share price history (below) over the past twelve months shows that the price is down 60%. Here’s why the company is undervalued.
Market Cap: $385 Billion
Enterprise Value: $361 Billion
Operating Earnings: $39 Billion
Acquirer’s Multiple: 9.10
Free Cash Flow (TTM)
Free Cash Flow: $35 Billion
FCF/EV Yield: 9.29%
Shareholder Yield: 12.50%
Piotroski F-Score: 3
Altman Z-Score: 8.217
ROA (5 Year Avge%): 23
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