Facebook Is The King Of The Metaverse

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Facebook Is The King Of The Metaverse

seekingalpha2021-08-18

Summary Facebook is the cheapest of the FAANG stocks. The stock, despite the recent share price increase, is still a good investment. With the outlook for the metaverse, however, Facebook is a steal....

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hbtho
·2021-08-18
Ok
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TeslaLegend
·2021-08-18
Pleease like and comment. Thanks!
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  Hope to add on good dips! [Happy][Miser]
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With the outlook for the metaverse, however, Facebook is a steal....</p>\n\n<a href=\"https://seekingalpha.com/article/4450274-facebook-is-the-king-of-the-metaverse\">Source Link</a>\n\n</div>\n","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Facebook Is The King Of The Metaverse</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFacebook Is The King Of The Metaverse\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-08-18 15:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4450274-facebook-is-the-king-of-the-metaverse><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nFacebook is the cheapest of the FAANG stocks.\nThe stock, despite the recent share price increase, is still a good investment. With the outlook for the metaverse, however, Facebook is a steal....</p>\n\n<a href=\"https://seekingalpha.com/article/4450274-facebook-is-the-king-of-the-metaverse\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://seekingalpha.com/article/4450274-facebook-is-the-king-of-the-metaverse","article_id":"1197623581","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1197623581","pubTimestamp":1629272199,"columns":[],"sourceInfo":null,"weMediaInfo":null,"summary":"Summary\n\nFacebook is the cheapest of the FAANG stocks.\nThe stock, despite the recent share price inc","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"Facebook是Metaverse之王","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FB":0.9},"content_text":"Summary\n\nFacebook is the cheapest of the FAANG stocks.\nThe stock, despite the recent share price increase, is still a good investment. With the outlook for the metaverse, however, Facebook is a steal.\nFrom my perspective, the stock is an anchor for patient investors with a long-term horizon.\n\nozgurdonmaz/E+ via Getty Images\nFrom a fundamental perspective, Facebook (FB) is the cheapest of the FAANG stocks. Based on the current multiples, the stock is still worth an investment, despite the recent price increases. The business model is stable and promises massive cash flows for years to come.\nWith the outlook for the metaverse, however, the Facebook stock is a steal. The company is in absolute pole position and is expected to play a major role in the metaverse. It will take a long time, and there will certainly be setbacks, but Facebook has the financial stability, the user base, and a proper pile of cash to help determine the path to and shape of the metaverse.\nEven though I joined the Facebook party late, I am bullish on the stock. From my perspective, the stock is an anchor investment for patient investors with a long-term horizon.\nI joined the Facebook party late\nI joined the Facebook party late and bought my first shares of the company last August. Sure, I missed most of the party so far. Since the IPO on May 18, 2012, the stock has delivered nearly 860 percent gains. Those who bought a few months later have even received price gains of over 1,200 percent.\nData by YCharts\nWell, better later than never, as long as the party will go on long enough, and that's the case with Facebook. To stay in the picture, many doubted that the party would be any good at all as analysts and investors had doubts about the business model. They questioned Facebook's ability to earn money and saw the smartphone market as a nail in the coffin for Facebook's business. However, the company has shown all doubters what it is capable of, as EPS rose from $0.01 in 2012 to $10.09 last fiscal year. During the same period, FCF per share grew from $0.17 to $8.18, and operating cash flow increased from $0.74 to $13.42. So now, Facebook has a highly profitable business in a growth market.\nWhy I do not work professionally in a marketing company\nMy reason for buying last August, however, was not necessarily Facebook's excellent track record. I had written the essence of my investment thesis in an analysis here on Seeking Alpha:\n\n I think Facebook is supposed to become a kind of mall, a social meeting spot where people don't just go to meet friends, but go shopping together or alone. For Facebook, which thus becomes a gatekeeper for matching customers and companies, this scenario is a real goldmine that I wouldn't want to miss.\n\nAnd here you see two things. First of all, I see Facebook's (future) business as being broader than just advertising. Sure, the bulk of last year's $85 billion in revenue came from advertising. But the point here is that Facebook is becoming a kind of universe and an analog world's replica where people and businesses/companies meet, transact, and have fun. The second thing you see is that I damn well shouldn't be working in marketing. Because what I have desperately tried to explain in the sentences others can summarize in one catchy word:\n\"Metaverse\"\nAdmittedly, \"metaverse\" is not a new term, yet it fits Facebook's prospects particularly well. Mark Zuckerberg has probably also recognized this and has been relatively open about it to analysts and investors. And I recommend every investor to read through the last earnings call's transcript:\n\n So what is the metaverse? It's a virtual environment. We can be present with people in digital spaces. And you can kind of think about this is an embodied Internet that you're inside of rather than just looking at. And we believe that this is going to be the successor to the mobile Internet. You're going to be able to access the metaverse from all different devices and different levels of fidelity from apps on phones and PCs to immersive virtual and augmented reality devices.\n\n\n Within the metaverse, you can build a hang out, play games with friends, work, create and more. You're basically going to be able to do everything that you can on the Internet today, as well as some things that don't make sense on the Internet today like dancing. The defining quality of the metaverse is presence, which is this feeling that you're really there with another person or in another place. Creation, avatars and digital objects are going to be central to how we express ourselves and this is going to lead to entirely new experiences and economic opportunities.\n\nMany people have laughed when they saw the first car, the concept of the internet, or heard about the blockchain. And so it is with the metaverse, which admittedly has one or two science-fiction elements in it. But we already see the first signs of such a shift toward a multiverse. Roblox (RBLX) or Tencent's (TCEHY)Fortnite are generally seen as the first manifestations of worlds that go in this direction. And of course, Mark Zuckerberg recognizes the potential of this world and the opportunities to monetize it.\n\n I expect that this is going to create a lot of value for many companies, up and down the stack.\n\nAgainst this background, the investments in Oculus Rift and a possible digital currency are, of course, small pieces of a puzzle that now add up to a bigger picture. Remember Microsoft (MSFT) or Amazon (AMZN) before the cloud business. Both companies could use their existing know-how, infrastructure, and cash flow to conquer the mega cloud growth market. And Facebook also wants to go through this evolution:\n\n So, in addition to being the next generation of the Internet, the metaverse is also going to be the next chapter for us as a company. And in the coming years, I expect people will transition from seeing us primarily as a social media company to seeing us as a metaverse company.\n\nFacebook has the pole position\nRegardless of how Facebook helps build one or more metaverses (interoperability and portability are important issues and somewhat open questions), the company has the pole position. The company has a concise path to consumers, as it can draw on many of its users. They are already on the spot, so to speak, and companies and advertisers all want to get to them and thus to Facebook.\nThe different social networks Instagram, Facebook, and WhatsApp can also be seen as different spaces with different use cases in a larger universe, except that the bridges between these spaces are currently not yet sufficiently available, primarily due to regulatory concerns. But Facebook at least already has these spaces and massive numbers of users who use them. And the user base continues to grow, as its daily active users reached 1.91 billion, corresponding to 7 percent increase YoY.\nIn addition, Facebook also has the financial strength to take action itself and for strategic acquisitions. For example, the company has access to $65 billion in cash and cash equivalents. Debts are virtually non-existent. Measured in terms of interest-bearing debt, the debt ratio is just 7.36 percent. In addition, the existing business will continue to generate high cash flows and profits in the coming years. According to analysts asked by FactSet Research, EPS is expected to increase from $10.09 to up to $20.\nThe stock is not too expensive\nIn addition, Facebook is not overpriced at the moment. In fact, Facebook is the most favorably valued stock in the FAANG Group.\nData by YCharts\nEven if we only look at the existing business and exclude possible evolutionary steps towards the metaverse, Facebook is still not too expensive based on a DCF analysis.\nFor this exercise, I am assuming revenue growth of 20 percent per year (terminal growth 10 percent). This growth rate is below the historical values of recent years as revenue grew by an average of 30 percent in the last three years. I have also set the operating margin (currently 42 percent) lower. Furthermore, I took 8 percent as a discount rate, which is also higher than the current rate.\nSource:Discount rate for Facebook\nOverall, I used the following data for the DCF analysis based on my estimates and analysts' forecasts.\nSource:alphaspread.com/estimates by author and FactSet\nAnd here we go with the result: Based on these rather conservative values, Facebook is slightly overvalued.\nSource: alphaspread.com/estimates by author and FactSet\nAt a lower discount rate of 6, however, Facebook would be undervalued.\nSource: alphaspread.com/estimates by author and FactSet\nSo it always depends on what assumptions we make and what database we use to make analyses like this. However, from my point of view, we can see from the DCF analysis and the fundamental view that Facebook is still not disproportionately overpriced. However, investors must be willing to pay a premium price.\nThe only thing is that all this number-crunching does not reflect the future prospects. Valuing Facebook only on the simple advertising market is like investors valuing Amazon 10 years ago only on the sales revenues of Amazon's online stores. In 2013, Amazon made only $3 billion in revenue from web services. In 2020, this figure has increased fifteenfold ($45.3 billion). So I'm evaluating Facebook today based on the advanced use cases around a metaverse. And even though the prospects here are hard to quantify, we're looking at something big here. And all this is little or not at all priced into the share price. Accordingly, this is a value opportunity for long-term investors.\nConclusion\nWhile Facebook is still a good buy based on the current multiples and the existing upside potential, it becomes a steal if we take the outlook for the metaverse into account. Of course, the metaverse doesn't come overnight. But the recent gains in Facebook's share price show that even Mr. Market is somewhat more optimistic about Facebook's prospects. Accordingly, Facebook is an anchor investment, especially for long-term investors.","kind":"news","is_publish_news":false,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":831087930,"gmtCreate":1629273439220,"gmtModify":1676529986687,"author":{"id":"3574935418304521","authorId":"3574935418304521","name":"hbtho","avatar":"https://static.tigerbbs.com/f083ceda901738dc46b48c3f49dc0dc7","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3574935418304521","authorIdStr":"3574935418304521"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/831087930","repostId":1197623581,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":831014101,"gmtCreate":1629272894403,"gmtModify":1676529986337,"author":{"id":"3572489627147183","authorId":"3572489627147183","name":"TeslaLegend","avatar":"https://static.tigerbbs.com/180ad6f06095bcbf2b6594d26c494752","vip":1,"hat":"https://static.tigerbbs.com/f84859c65fc2d7681e28f6b8e9b0535a","crmLevel":4,"crmLevelSwitch":1,"idStr":"3572489627147183","authorIdStr":"3572489627147183"},"htmlText":"Pleease like and comment. Thanks!","listText":"Pleease like and comment. Thanks!","text":"Pleease like and comment. Thanks!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":3,"repostSize":0,"link":"https://ttm.financial/post/831014101","repostId":1197623581,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":5566883,"gmtCreate":1629283237175,"gmtModify":1663232555948,"authorId":3573818563583937,"author":{"id":3573818563583937,"idStr":"3573818563583937","authorId":3573818563583937,"name":"Starbucks","avatar":"https://static.tigerbbs.com/adf9c30b19f3cc477ca4f1198d2c8b81","vip":1,"crmLevel":6,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":831014101,"type":1,"supId":0,"prevId":0,"content":"Hope to add on good dips! [Happy][Miser]","text":"Hope to add on good dips! [Happy][Miser]","html":"Hope to add on good dips! [Happy][Miser]"},{"id":5565608,"gmtCreate":1629272985708,"gmtModify":1663232548843,"authorId":3564628688986709,"author":{"id":3564628688986709,"idStr":"3564628688986709","authorId":3564628688986709,"name":"Cynphony","avatar":"https://static.tigerbbs.com/0a4d7b3613c4c16a986696433173f5f7","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":831014101,"type":1,"supId":0,"prevId":0,"content":"F","text":"F","html":"F"},{"id":5565633,"gmtCreate":1629273283550,"gmtModify":1663232547945,"authorId":3581985604623691,"author":{"id":3581985604623691,"idStr":"3581985604623691","authorId":3581985604623691,"name":"jtttm","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":831014101,"type":1,"supId":5565608,"prevId":0,"content":"?","text":"?","html":"?"}],"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":31,"commentSize":2,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}