{"id":2652,"date":"2023-05-01T07:43:51","date_gmt":"2023-05-01T11:43:51","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/meta-platforms-stock-is-trading-close-to-its-fair-value\/"},"modified":"2023-05-01T07:43:52","modified_gmt":"2023-05-01T11:43:52","slug":"meta-platforms-stock-is-trading-close-to-its-fair-value","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=2652","title":{"rendered":"Meta Platforms\u2019 Stock Is Trading Close To Its Fair Value"},"content":{"rendered":"
\n

Meta Platforms\u2019 stock (NASDAQ
\n NDAQ
\n <\/fbs-ticker>: META) has gained 98% YTD, while the S&P500 is up only 8% over the same period. The stock price touched a 52-week low in the last quarter of 2022. However, it has seen a sharp recovery since then. It was because of several reasons, better than expected results in both Q4 2022 and Q1 2023, consistent growth in the user base, a strong business model, focus on optimizing costs, and a share repurchase program worth $40 billion.<\/p>\n

The stock is currently trading around $239 per share, which is 4% above its fair value of $228 \u2013 Trefis\u2019 estimate for Meta Platforms\u2019 valuation<\/strong>.<\/strong> Its total revenues increased 3% y-o-y to $28.65 billion in the first quarter of 2023, beating the street estimates. Further, daily active users (DAUs) improved by 4% y-o-y to 2.04 billion for March 2023. Along with this, the firm repurchased $9.2 billion of common stock in Q1, as part of its share repurchase program. That said, the cost and expenses rose by 10% y-o-y, reducing the net income by 24% y-o-y to $5.7 billion. Notably, the expense figure includes charges related to restructuring efforts of $1.14 billion.<\/p>\n

The top line marginally decreased to $116.6 billion in FY2022. The decrease was due to a tough macroeconomic condition, which negatively impacted advertising revenues. However, the DAUs still improved by 4% y-o-y. On the cost front, the net income was down 41% y-o-y to $23.2 billion. It was due to an unfavorable increase in research & development costs.<\/p>\n

Moving forward, we expect the growth rate of advertising revenues to recover over the subsequent quarters. Notably, META expects the Q2 revenues to remain between $29.5-32 billion. Overall, we estimate Meta Platforms\u2019 revenues<\/strong> to touch $122.4 billion in FY2023. Additionally, the adjusted net income is likely to remain around $25.73 billion in the year. This coupled with an annual EPS of $10.02 and a P\/E multiple of just below 23x will lead to a valuation of $228.<\/p>\n

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Meta Platforms\u2019 stock (NASDAQ NDAQ : META) has gained 98% YTD, while the S&P500 is up only 8% over the same period. The stock price touched a 52-week low in the last quarter of 2022. However, it has seen a sharp recovery since then. It was because of several reasons, better than expected results in […]<\/p>\n","protected":false},"author":1,"featured_media":2653,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-2652","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"\nMeta Platforms\u2019 Stock Is Trading Close To Its Fair Value | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Meta Platforms\u2019 stock (NASDAQ NDAQ : META) has gained 98% YTD, while the S&P500 is up only 8% over the same period. 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