Why Meta Platforms Inc Stock Is A Buy? Acquirer’s Multiple Stock Screener Analysis

Johnny HopkinsStock Screener2 Comments

As part of our ongoing series here at The Acquirer’s Multiple, each week we focus on one of the stocks from our Stock Screeners, and why it’s a ‘buy’ based on key fundamentals.

One of the cheapest stocks in our Stock Screeners is:

Meta Platforms Inc (META)

Meta is the world’s largest online social network, with 3.8 billion family of apps monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. 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 more than 45% coming from the U.S. and Canada and over 20% from Europe.

Overall, the company has seen significant growth in revenue, gross profit, operating income, and net income from continuing operation net minority interest from 2021 to 2023. This growth is likely due to a number of factors, including the company’s expansion into new markets, the launch of new products, and the improvement of its operational efficiency.

A quick look at the share price history (below) over the past twelve months shows that the price is up 86.50%. Here’s why the company is undervalued.

META Chart

META data by YCharts

Key Stats

Market Cap: $769.76 Billion

Enterprise Value: $753.19 Billion

Operating Earnings

Operating Earnings: $36.67 Billion

Acquirer’s Multiple

Acquirer’s Multiple: 20.50

Free Cash Flow (TTM)

Free Cash Flow: $24.03 Billion

FCF/EV Yield %:

FCF/EV Yield: 3.12

Shareholder Yield %:

Shareholder Yield: 3.10

Other Indicators

Piotroski F Score (TTM): 6.00

Altman Z-Score (TTM): 7.832

ROA (5 Year Avge%): 18

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2 Comments on “Why Meta Platforms Inc Stock Is A Buy? Acquirer’s Multiple Stock Screener Analysis”

  1. @Steve – I agree that it is unclear why META is a buy. My understanding from Tobais’s book was Stocks with a low acquirer’s multiple tend to be better than stocks with a high one. The reason for this is that low debt and a high amount of company’s cash results in a better financial position. This results in a lower acquirer’s multiple and makes these companies more attractive investments. If this is correct than 20 is actually high. My view conforms with the blog post on STLA (14 Sep 2023) also by JH -“We currently have the stock trading on an Acquirer’s Multiple of 1.20 which means that it remains undervalued.” But I am an amateur not an expert and could have misinterpreted.

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