Meta Platforms, Inc. ($META) Earnings (Q3 FY22)

 Meta Platforms, Inc. ($META) Earnings and Opinion:


Meta is a company in the Communication Services sector and operates in the Internet Content & Information industry. The company develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, wearables, and in-home devices worldwide. Meta was incorporated in 2004 and is currently headquartered in Menlo Park, California. The company made its debut on the stock market in 2012.

Meta Earnings Results:

  • Revenue of $27.71B beating expectations of $27.41B
  • Adj Operating Income of $5.66B missing expectations of $6.29B
  • CapEX of -$9.38B missing expectations of -$8.04B
  • Diluted EPS of $1.64 missing expectations of $1.89
Opinion:
Meta fell down to earth on its earnings report on Wednesday. The company dropped 25% on Wednesday for its worst day since February. Investors took a disappointing revenue outlook toughly. Zuckerberg claimed that the high costs were investments into the future. The company has lost $676B this year, which now disregards it form the largest 20 companies in the US. Meta has transitioned to be betting on the long-term and that is what Zuckerberg has mentioned. The question that looms, is how much the bet on the future will pay off. The valuation seems to be right near fair value here. It is kind of hard to compare with peers here, as the companies it is competing with all have negative earnings. The P/S ratio is probably the best measure and it sits at 2.15. In my opinion, Meta is a hard pass for me. I think the company is too volatile and I have never been a big fan of it. Sure, it is a future looking company, but how realistic do we think the metaverse is going to turn out. I think it may be a bust, and it seems to be kind of just a phase like cryptocurrency and NFTs. I think if you are a believer in this company, and see some potential in the future, it could be a good time to pick it up. For now though, I am staying out of Meta, until I can get some clarity on the future and some proof that it is working. 


*Information from Bloomberg and Yahoo Finance

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