To The Moon

💎 Meta Platforms (META) — A Year of Powerful Fundamentals and Hidden Value

Over the past year, Meta Platforms has demonstrated exceptional financial resilience and growth, transforming itself from a market laggard into one of the most profitable and efficient technology giants. Despite short-term volatility and a recent pullback in share price to the $650–$660 range, its fundamentals remain remarkably strong — a classic setup for a value investor seeking discounted excellence.

Meta’s revenue for the fiscal year ended December 2024 surged to around US$164 billion, representing an impressive 22% year-on-year increase from the previous year. This robust top-line growth was driven by the continued dominance of its Family of Apps — Facebook, Instagram, Messenger, and WhatsApp — which collectively engage billions of users every single day. Advertising demand recovered strongly, aided by Meta’s advanced AI-driven targeting systems, while the integration of short-form video through Reels helped reclaim engagement time from rivals like TikTok.

Earnings reflected this momentum. Net income soared to roughly US$62 billion, a gain of about 59% year over year, pushing diluted earnings per share to US$23.86 from US$14.87 the year before. This surge in profitability reflects not only improved ad monetization but also disciplined expense management. The company’s operating margin expanded to about 42%, up from 35% in 2023, showing that Meta is generating more profit from every dollar of revenue. In the most recent quarter alone, operating margin reached a stellar 48%, signaling peak efficiency.

The strength of Meta’s balance sheet reinforces this story of stability and financial firepower. The company ended the year with nearly US$78 billion in cash and marketable securities and modest long-term debt of around US$29 billion. Free cash flow continues to rise, enabling Meta to fund both aggressive investments in artificial intelligence infrastructure and shareholder returns. In 2024, the company returned nearly US$30 billion through share repurchases and dividends — a mark of confidence in its own future earnings capacity.

While the Reality Labs division continues to post operating losses due to ongoing investments in virtual and augmented reality, the segment represents Meta’s long-term bet on digital environments beyond social media. The losses here are already baked into investor expectations, while the upside of success in spatial computing and AI integration remains significant. For now, the company’s Family of Apps continues to serve as the powerhouse of profitability, providing the cash flow that funds future innovation.

From a broader perspective, Meta’s fundamentals remain some of the best in the technology sector. It has strong earnings growth, a fortress-like balance sheet, and vast free cash flow — all of which offer resilience against market volatility. The market’s current pessimism around AI spending and regulatory concerns appears to have created a temporary price dislocation, offering investors the opportunity to accumulate a fundamentally elite company at a discount.

At $650–$662, Meta’s valuation compresses to a forward price-to-earnings ratio in the mid-20s, a level rarely seen for a business of this quality. For investors who buy when fear dominates, Meta now represents an excellent long-term entry point. The fundamentals are unshaken, profitability remains stellar, and the company continues to dominate digital interaction on a global scale.

Meta’s past year was not just a rebound — it was a redefinition. The company proved it can adapt, grow, and deliver shareholder value even while transforming its business for the future. With AI innovation at its core, a rebounding ad ecosystem, and massive cash reserves, Meta stands as a symbol of enduring strength — and at today’s prices, a rare opportunity to own quality at a discount.