Meta Platforms: The Path To $500 Just Started

seekingalpha2022-06-05

SummaryMeta Platform's stock has been under significant pressure recently.Sentiment surrounding the company has soured due to numerous adverse developments.Now, the company's long-time COO, Sheryl ...

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Comments

mel18
2022-06-06
mel18
500 is a huge jump from today's price, okay, over almost 5-6 years, but things could change drastically too
ZenInv
2022-06-06
ZenInv
Meaning it's the bottom now?
xiaobaii
2022-06-06
xiaobaii
like & comment please
xiaobaii
2022-06-06
xiaobaii
like & comment please
xiaobaii
2022-06-06
xiaobaii
like & comment please
Bank of Arai
2022-06-06
Bank of Arai
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(NASDAQ:FB), formerly known as Facebook, has been under substantial pressure. The stock recently hit a multi-year low of around $170, marking a 55% decline from the company's ATH achieved in September of 2021. Continuous negative news flow, regulatory issues, growth concerns, an earnings decline, and other factors have plagued Meta, leading to multiple compression and significant stock price declines. Now, the company's long-time COO, Sheryl Sandberg, is departing.Is Facebook entering a stage of terminal decline? I think not. A management shakeup may be precisely what the company needs to get its house in order and its growth story back on track. Moreover, Meta is remarkably cheap right now, as the company's stock trades at about 12-15 times forward EPS estimates. As Meta grows revenues and increases EPS, sentiment should improve, leading to multiple expansion and a much higher stock price.Sheryl Sandberg LeavingYes, Sheryl Sandberg, Facebook's long-time COO, is leaving, but is this bad? Mrs. Sandberg played an essential role in shaping Meta into what the company is today. Sandberg's contributions to Facebook's global expansion, sales, marketing, business development, and human resources will always be remembered, and I will be forever grateful for all she has done. However, as a Facebook shareholder, I am not sorry to see her leave. After fourteen years of service at the company, it's plausible that Sheryl has done what she can. After all, Facebook has made some missteps in recent years. The company has come under fire for not stopping the spread of misinformation and harmful material.Moreover, the company is currently facing an antitrust lawsuit from the FTC. And who can forget the Cambridge Analytica Scandal? Facebook's growth has been decelerating faster than expected, and the company's stock got cut in half over the last nine months.I am not insinuating that Mrs. Sandberg is responsible for all of Facebook's troubles, but as the company's COO, Sandberg is essentially accountable for the company's day-to-day activities. Therefore, if anyone is answerable for the company's poor performance recently, Sandberg may be at the top of the list. Therefore, Mrs. Sandberg's contributions have been invaluable over the years, but it may be time for a shakeup at the company's helm.Now that Sandberg is leaving, Meta indicated that a reorganization would occur as the new COO, Javier Olivan, steps into the top slot. Mr. Olivan is the company's chief growth officer and will take over the COO spot this fall. A shakeup at the top of the company's management structure may be what Meta needs to get its house in order and its growth story back on track.Placing the company's chief growth officer in the top slot may be an ingenious move by the company's CEO, Zuckerberg. Facebook's growth story has stumbled in recent quarters, resulting in substantial declines in the company's stock. The company's market cap has crashed by an unprecedented $500 billion since the top last fall. Sandberg's departure, a reorganization, and placing Facebook's top growth person at the helm may be what the company needs to get its stock moving higher again.From Facebook To MetaFacebook changed its name to Meta or Meta Platforms in a rebranding effort last fall. Moreover, the company is changing its stock ticker symbol from FB to META soon (beginning 9 June 2022). The company's continued move away from its old Facebook image and towards its new Meta image is a wise strategy. In recent years, Facebook became stale and dry, not exciting anymore, boring even. Meta is much more exciting and full of possibilities from a marketing standpoint.Moreover, Facebook was a company constantly plagued by negative news flow in recent years. Meta can help the company get away from all the negative factors surrounding Facebook's past and improve the sentiment surrounding the stock. Furthermore, due to the numerous businesses under Meta's umbrella, the name Facebook did not accurately represent the company anymore. Meta sounds, looks, and feels much better, should improve sentiment surrounding the stock and could lead to multiple expansion and a higher stock price as the company advances from here.Valuation Perspective: Meta Is CheapMeta has earned $13.22 in EPS in its last four quarters, putting the company's TTM P/E ratio at just 15. Moreover, if we look at Meta's recent low of $170, the company's TTM P/E ratio dropped to below 13. Considering Meta's significant growth prospects and substantial profitability potential, the company's current TTM valuation is remarkably low. Meta is going through a transitory EPS decline due to increased investments into the Metaverse and other temporary factors. Nevertheless, consensus EPS estimates point to about $12 in EPS for the company over the next 12 months. This EPS estimate puts the company's forward P/E ratio at about 16 now, which is still very cheap for a company in Meta's position.META - EPS EstimatesMETA EPS (SeekingAlpha.com)For full-year 2023, Meta should deliver about $13.50, per consensus analysts' figures, and analysts predict the company should earn approximately $15.70 in 2024. These EPS estimates place the company's valuation at about 12-15 times forward earnings, remarkably cheap for a dominant, market-leading company like Meta. Additionally, EPS estimates came down substantially due to Meta's slowdown in the recent quarters.Meta - EPS RevisionsMETA EPS revisions (SeekingAlpha.com)We've seen EPS estimates come down in recent quarters, and we also saw Meta beat consensus estimates by about 8% in its most recent report. EPS estimates may have come down too far amongst the pessimism recently. Meta may continue surpassing the lowballed consensus estimates as we advance. Therefore, we could see higher EPS materialize in the coming quarters, implying that Meta's stock is even cheaper than it appears right now. Future EPS beats should be followed by upward EPS revisions, multiple expansion, and a higher stock price for Meta.Here's what Meta's financials could look like as we advance:Year2022202320242025202620272028Revenue (billions)$130$148$170$194$219$245$272Revenue growth14%15%14%13%12%11%10%EPS$12$14$16.50$19$21.50$25$28Forward P/E ratio14161718181716Price$196$264$323$387$450$476$500Source: AuthorI'm not using overly bullish growth estimates here. My growth figures are roughly in line with consensus analysts' expectations. Also, the forward P/E ratio of 14-18 is relatively modest. As Meta continues growing revenues and expanding EPS, its stock should see some multiple expansion, and its P/E ratio could move above the 18-20 range in a bullish case outcome. Therefore, Meta's stock will likely move substantially higher in the coming years and could reach $500 by 2028 or sooner.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9053937782,"gmtCreate":1654474540346,"gmtModify":1676535452269,"author":{"id":"4097201280076440","authorId":"4097201280076440","name":"mel18","avatar":"https://community-static.tradeup.com/news/cb8392cdbd4f593469aed779f484434a","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"4097201280076440","authorIdStr":"4097201280076440"},"htmlText":"500 is a huge jump from today's price, okay, over almost 5-6 years, but things could change drastically too&nbsp;","listText":"500 is a huge jump from today's price, okay, over almost 5-6 years, but things could change drastically too&nbsp;","text":"500 is a huge jump from today's price, okay, over almost 5-6 years, but things could change drastically too","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9053937782","repostId":2240218942,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9053043467,"gmtCreate":1654471774059,"gmtModify":1676535450849,"author":{"id":"4098783902581330","authorId":"4098783902581330","name":"ZenInv","avatar":"https://community-static.tradeup.com/news/033bd47e3df1977aaef462f53997e9f1","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"4098783902581330","authorIdStr":"4098783902581330"},"htmlText":"Meaning it's the bottom now?","listText":"Meaning it's the bottom now?","text":"Meaning it's the bottom now?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9053043467","repostId":2240218942,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9053016047,"gmtCreate":1654466305289,"gmtModify":1676535449615,"author":{"id":"3571345352614779","authorId":"3571345352614779","name":"xiaobaii","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3571345352614779","authorIdStr":"3571345352614779"},"htmlText":"like &amp; comment please&nbsp;","listText":"like &amp; comment please&nbsp;","text":"like & comment please","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9053016047","repostId":2240218942,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9053018725,"gmtCreate":1654466294067,"gmtModify":1676535449633,"author":{"id":"3571345352614779","authorId":"3571345352614779","name":"xiaobaii","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3571345352614779","authorIdStr":"3571345352614779"},"htmlText":"like &amp; comment please&nbsp;","listText":"like &amp; comment please&nbsp;","text":"like & comment please","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9053018725","repostId":2240218942,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9053018589,"gmtCreate":1654466277041,"gmtModify":1676535449609,"author":{"id":"3571345352614779","authorId":"3571345352614779","name":"xiaobaii","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3571345352614779","authorIdStr":"3571345352614779"},"htmlText":"like &amp; comment please&nbsp;","listText":"like &amp; comment please&nbsp;","text":"like & comment please","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9053018589","repostId":2240218942,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9053095252,"gmtCreate":1654449061776,"gmtModify":1676535449059,"author":{"id":"4099738254896670","authorId":"4099738254896670","name":"Bank of Arai","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4099738254896670","authorIdStr":"4099738254896670"},"htmlText":"K","listText":"K","text":"K","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9053095252","repostId":2240218942,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":347,"commentSize":25,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; 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