A BRIEF ANALYSIS OF META inc. STOCK - (META)

16/6/2022

BUSINESS

Meta mission is to give people the power to build community and bring the world closer together. All of their products, including apps, share the vision of helping to bring the metaverse to life. Their top priority is to build useful and engaging products that enable people to connect and share through mobile devices, personal computers, virtual reality (VR) headsets, wearables, and in-home devices. They have 2.93 billion monthly active users as the first quarter of 2022. Their products include:

Facebook is a place for people to share life's moments and discuss what's happening, nurture and build relationships, discover and connect to interests, and create economic opportunity. They can do this through News Feed, Stories, Groups, Watch, Marketplace, Reels, Dating, and more.

Instagram brings people closer to the people and things they love. Instagram Feed, Stories, Reels, Video, Live, Shops, and messaging are places where people and creators can express themselves and push culture forward through photos, video, and private messaging, and connect with and shop from their favorite businesses.

Messenger is a simple yet powerful messaging application for people to connect with friends, family, groups, and businesses across platforms and devices through chat, audio and video calls, and Rooms.

WhatsApp is a simple, reliable, and secure messaging application that is used by people and businesses around the world to communicate and transact in a private way.

They generate substantially all of their revenue from selling advertising placements to marketers. Their ads let marketers reach people based on a variety of factors including age, gender, location, interests, and behaviors. Marketers purchase ads that can appear in multiple places including on Facebook, Instagram, and third-party applications and websites. They are also investing heavily in other consumer hardware products and several longer-term initiatives, such as
augmented reality,
artificial intelligence (AI), and
connectivity efforts, to develop technologies that we believe will help us better serve our mission over the long run.

BRAND PORTFOLIO

RISK FACTORS

Risks related to META products might fail to add and retain existing users or add new users, or if their users decrease their level of engagement with their products, revenue, financial results, and business may be significantly harmed. The occurrence of security breaches, improper access to or disclosure of user data, and other cyber incidents or undesirable activity on their platform; their ability to obtain, maintain, protect, and enforce our intellectual property rights. If people do not perceive their products to be useful, reliable, and trustworthy, they may not be able to attract or retain users or otherwise maintain or increase the frequency and duration of their engagement.

A number of other social networking companies that achieved early popularity have since seen their active user bases or levels of engagement decline, in some cases precipitously. There is no guarantee that we will not experience a similar erosion of our active user base or engagement levels. Meta’s user engagement patterns have changed over time, and user engagement can be difficult to measure, particularly as they introduce new and different products and services.
Governments from time to time seek to censor or moderate content available on Facebook or our other products in their country, restrict access to our products from their country partially or entirely, or impose other restrictions that may affect the accessibility of META products in their country for an extended period of time or indefinitely. For example, user access to Facebook and certain of our other products has been or is currently restricted in whole or in part in China, Iran, and North Korea. In addition, government authorities in other countries may seek to restrict user access to our products if they consider us to be in violation of their laws or a threat to public safety or for other reasons, and certain of our products have been restricted by governments in other countries from time to time. For example, in June 2020, Hong Kong adopted a National Security Law that provides authorities with the ability to obtain information, remove and block access to content, and suspend user services, and if they are found to be in violation of this law then the use of Facebook products may be restricted.

KEY DATA

The following tables
provide a
summary of META'S Corp.
Income Statements

REVENUE vs NET INCOME [2008 -2021]

META
TECHNICAL ANALYSIS
STOCK PRICES [ 2019 - SYS.DATE ]

META's quarterly
Historical stock prices

META's monthly
Historical stock prices

VALUATION

PE vs Industry: META is good value based on its Price-To-Earnings Ratio (12.7x) compared to the US Interactive Media and Services industry average (42.7x).
PE vs Market: META is good value based on its Price-To-Earnings Ratio (12.7x) compared to the US market (15.2x).

DIVIDNDs

FACEBOOK do not intend to pay cash dividends for the foreseeable future.

They have never declared or paid cash dividends on their capital stock. They currently intend to retain any future earnings to finance the operation and expansion of business and fund their share repurchase program, and they do not expect to declare or pay any cash dividends in the foreseeable future. As a result, you may only receive a return on your investment from their Class A common stock if the trading price of your shares increases.

FINANCIAL HEALTH

As of March 31, 2022, $0.4 million of loan and lease balances that were granted deferral payments by the Company were still in their deferment period. These modifications consisted solely of payment deferrals ranging from 30 days to six months. These modifications are in line
with applicable regulatory guidelines and, therefore, they are not reported as troubled debt restructurings. Other than the loan modifications that are on nonaccrual status, the Company is accruing and recognizing interest income on these modifications during the payment deferral period. In conclusion META is has no debt, therefore coverage of interest payments is not a concern, therefore we can conclude Meta financial position is significantly healthy.

PERFORMANCE

COMPETITORS

Facebook business is highly competitive. Competition presents an ongoing threat to the success of Facebook business. As to date META is facing a significant competition in every aspect of their business, including from companies that provide tools to facilitate communications and the sharing of information, companies that enable marketers to display advertising, and companies that provide development platforms for application developers as well as with companies that provide social, media, and communication products and services that are designed to engage users on mobile devices and online. Facebook business is rapid change, and disruptive technologies, therefore face significant competition across broad platforms that replicate capabilities they provide. For example, among other areas, Apple in messaging, Google and YouTube in advertising and video, Tencent and Snap in messaging and social media, Byte dance and Twitter in social media, and Amazon in advertising.

No one knows what the future will held, therefore some of Facebook current and potential competitors may have greater resources, experience, or stronger competitive positions in certain product segments, geographic regions, or user demographics than we do. For example, some of their competitors may be domiciled in different countries and subject to political, legal, and regulatory regimes that enable them to compete more effectively than Facebook. These factors may allow our competitors to respond more effectively than us to new or emerging technologies and changes in market conditions. Facebook believe that some users, particularly younger users, are aware of and actively engaging with other products and services similar to, or as a substitute for, their products and services, and Facebook believe that some users have reduced their use of and engagement with their products and services in favor of these other products and services. In the event that users increasingly engage with other products and services, Facebook may experience a decline in use and engagement in key user demographics or more broadly, in which case their business would likely be harmed.

MANAGEMENT

How experienced are the management team and are they aligned to shareholders interests?
Average management tenure 5.4 years.
CEO - Mark Elliot Zuckerberg (37 years young): have 17.9 years tenure, with a compensation of US$26, 823, 061. Mark total compensation is above average for companies of similar size in the US market( $13.3Mill)
Mr. Mark Elliot Zuckerberg founded Meta Platforms, Inc. (formerly known as Facebook, Inc.) in 2004 and its Chief Executive Officer since July 2004 and Chairman since January 2012. Mr. Zuckerberg is responsible for setting the overall direction and product strategy of Meta Platforms. He leads the design of Meta Platforms’ service and development of its core technology and infrastructure. Mr. Zuckerberg is also a Co-Founder of Breakthrough Energy LLC, which he co-founded in November 2015. He has been a Director of Meta Platforms, Inc. (formerly known as Facebook, Inc.) since July 2004. He attended Harvard University where he studied computer science.

OWNERSHIP STRUCTURE

Institutions: 0.6 %
General Public: 77 %
Individual Insiders: 0.6%

TOP SHAREHOLDERS

CONCLUSSION

Do you understand the product or service offered by the company?
Will society still be using this product over the next 15 years?
Does the company have a MOAT?

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