Meta Stock Is Too Cheap to Pass Up In the US
By Shiva Kumar
Advertising and the metaverse have the potential to turn this business into a long-term cash cow. Let's set aside Meta's massive profile as a carefully followed, $560 billion mega-cap.
Still, many people are critical of Meta's high spending to realize CEO and founder Mark Zuckerberg's vision of the metaverse as the company.
If we just look at Meta Platforms as regular stock, it has a lot to offer investors, thanks to its consistently profitable core business and high cash flow.
That's especially true given the stock's drop of over half (at the time of writing) since September.
pending is tasked with laying the groundwork for its metaverse goals.
However, advertising, which generated $115 billion in sales last year, remains the company's bread and butter for the time being.
Despite this, Meta announced profits of $2.72 per share, which were more than projected.
The price to earnings (P/E) ratio is one method by which analysts value a company's shares.
Simply divide the share price by its annual earnings per share. For the next two years, analysts are still predicting double-digit percentage profit growth.
We may claim that, based on Meta's 2021 profitability, the stock is currently trading at one of its lowest P/E valuations since its IPO a decade ago.
Despite its significant investment in its metaverse, Meta has more than $44 billion in cash on hand and generated $8.5 billion in free cash flow in the first quarter of this year.
Meta's cash flow indicates that it has enough money to perform activities that provide immediate benefit to its shareholders, such as repurchasing its stock.
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