Meta Platforms Stock: Buy The Crash, Buy The Metaverse (NASDAQ: FB)

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Meta Platforms, Inc./Facebook (NASDAQ: FB) has declined since last September, but essentially collapsed after the company released a disappointing earnings report in early February. The Meta stock traded at $ 380 at its peak and is now below $ 190, representing a has not yet seen a drop of more than 50% in the price of the tech giant’s share. However, Meta remains a dominant and market -leading company in its industry and is expected to remain a major player in the social media space.

In addition, the company is now less expensive and should continue to generate strong revenue growth in the coming years. While Meta faces slower growth and a transient decline in EPS, Facebook is expected to return to profit growth as the business scales.

Meta’s revenue was close and shares of the company fell sharply during the event. Meta can beat estimated revenue at a discount, and given the company’s huge revenue potential, Meta shares seem like a good buy right now.

FB 1 year

FB Stock Chart

FB (

People love Facebook for $ 380, and many hate it for under $ 190 now. What happens to “buy low, sell high” and buy when there is “blood in the streets”? FB initially crater after reporting worse-than-expected results in the fourth quarter, sending shares of the significance of a record one-day decline in market capitalization. We saw a modest rebound in March, but stocks fell 25% from recent highs in early April. Meta stocks oversold again, but the stock is trying to bottom around the significant $ 180-190 support. We also see Full Stochastic coming back higher, which means a possible change in chart momentum. Facebook returned everything it had acquired over the past four years and sold it at the same price as before.

then and now

In 2018, Facebook is trading at the same price, after the company has nearly $ 50 billion in annual revenue, and this year’s (consensus) estimate is nearly $ 130 billion. Meta’s market capitalization is now nearly $ 500 billion, which means that in 2018 the stock has sold nearly ten times as much and is only sold nearly 3.8 times as much as it currently sells.

  • The gross profit of “TTM” in the last twelve months was about 35 billion dollars and almost 95 billion dollars now.
  • TTM’s operating revenue was previously $ 20 billion and is now $ 47 billion.
  • TTM’s revenue was $ 16 billion, and is now $ 39 billion.

FB revenue, profit and earnings have grown significantly in recent years, but the stock is essentially back to where it was four years ago. Most of Facebook’s profit metrics grew 2-3x in that period, indicating that the stock is cheaper now than ever before. So why is Facebook so cheap and the stock worth buying?

Is Meta a purchase?

FB estimation

Estimates (

We saw that Facebook had no estimated EPS in the last quarter. That wasn’t a big mistake, but the company missed out on EPS by about 15 cents. In addition, this year is likely to see a dramatic decline in EPS. Last year Facebook earned $ 13.80, this year the consensus estimate is $ 12.16 and next year the estimate is $ 14.39 (consensus of 32 analysts).

Why did EPS decline in the first place?

We know Facebook is betting big in the metaverse. Whether the stakes will pay off remains to be seen, but a virtual world of Facebook seems likely to attract a lot of people (billions, maybe). So, I can’t examine the company’s ambitions to bet on the next stage of Internet evolution. In my opinion, Meta investments in the metaverse will pay off, but it will take time, and the metaverse is likely to be a big task in 5-10 years.

Companies that early invested in it, such as Facebook, will become market leaders in this lucrative Internet and global virtual marketplace. Some investors were angry that Facebook spent more than analysts expected on its metaverse projects last quarter, and because there was some uncertainty about when the investment would pay off, many threw away the stock. Is this a wise way to invest? Should Meta shareholders be more patient and give Mark Zuckerberg and the Facebook team the benefit of the doubt? Love him or hate him, Mark Zuckerberg has enriched a lot of people. He’s built a good company, made smart claims, and probably knows more about Metaverse than you or I do.

Therefore, I view the fall in revenue as a temporary event that most companies face in their life cycle. Now, let’s take another look at the revenue numbers. Last year, the company achieved EPS of $ 13.80, putting the TTM P/E ratio at just 13.5. Next year, consensus estimates are $ 14.39, putting the P/E ratio ahead of the company at just 13, much cheaper for a dominant and market -leading company in Facebook’s position.

In addition, we have seen strong revenue growth. Last year the company reported revenue of $ 118 billion, this year it is estimated at $ 131 billion and next year analysts expect $ 153 billion in revenue. As a result, we are seeing revenue growth each year rapidly from 11% this year to almost 17% in 2023.

Income estimates

Increase revenue

Revenue Growth (

We should continue to see healthy revenue growth (15-20%) each year as the business grows in the coming years. In addition, the company will also need to return to EPS growth in the coming years. As the company illustrates its ability to return EPS growth, its P/E multiple should increase. The stock is currently trading around a forward P/E of 13, but it could trade around a multiple of 18-22 once there is more certainty about its future earnings potential.

Here’s what Meta’s finances will look like in the coming years:

year 2022 2023 2024 2025
earnings $ 131 billion $ 153 billion $ 176 billion $ 199 billion
Increase revenue 11% 17% 15% 13%
PES $ 12.16 $ 14.39 $ 17.26 $ 20.72
Pass the P/E ratio 15 18 20 22
price in part $ 216 $ 311 $ 415 $ 525

Source: The author

If the company returns to a stable EPS of almost 15-20%, Meta’s EPS could rise to $ 25 over several years. In addition, as the company returns to growth and its earnings potential becomes more transparent, the stock will need to re-post a higher P/E multiple. Meta currently sells at a forward P/E ratio of 13, but this ultra-low multiple is unlikely to last. Instead, the stock is likely to see more demand in the coming years, pushing its P/E multiple into the 18-22 range, in line with other tech-focused growth companies showing weak growth in stocks.double-digit income. By adopting a slightly higher P/E multiple, we can see that the company’s stock could rise in the $ 400-500 range within a few years. So, I find Facebook to be an attractive buy here and could increase my position in the company in the coming days.


Of course, investing in Meta is not without risk. Increased competition, government regulation, slowdown in the broader economy and other variable risks for Facebook. Ad spending may slow due to a slow economy and other factors, which can negatively affect Meta revenue. Company investments in the metaverse can fail, further depressing the stock price. The Company’s social media platforms may experience long periods of downturn, which has a negative impact on growth and revenue. Despite my strong view, there are many risks associated with Facebook/Meta, and one should carefully consider the risks before investing in the company’s stock.

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