Meta Platforms, Inc. (META) | Investment Case

1. Company Snapshot

1.a. Company Description

Meta Platforms, Inc.engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide.It operates in two segments, Family of Apps and Reality Labs.

The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately.The Reality Labs segment provides augmented and virtual reality related products comprising consumer hardware, software, and content that help people feel connected, anytime, and anywhere.The company was formerly known as Facebook, Inc.

and changed its name to Meta Platforms, Inc.in October 2021.Meta Platforms, Inc.

was incorporated in 2004 and is headquartered in Menlo Park, California.

Show Full description

1.b. Last Insights on META

Meta Platforms, Inc.'s recent momentum is driven by its strategic AI-led investments, which are fueling renewed growth. The company's planned capital expenditures and AI expansion strategy have bolstered investor confidence. A Wall Street analyst reaffirmed a positive outlook, maintaining a 'Buy' rating, citing confidence in Meta's medium- to long-term growth prospects. Additionally, Meta's accelerating ad monetization cadence and excellent Q1'26 revenue growth guidance of +29.9% YoY are contributing to its growth prospects. Analysts see a compelling capital appreciation potential, with a target price of $976.

1.c. Company Highlights

Last Price	706.41
Change Percentage	-1.41%
Open	714.37
Previous Close	716.5
Market Cap ( Millions)	1780855
Volume	14250265
Year High	796.25
Year Low	479.8
M A 50	650.07
M A 200	682.33

FCF Yield	2.59%
Dividend Yield	0.30%
ROE	30.56%
Debt / Equity	38.62%
Net Debt / EBIDTA	45.93%
Price To Book	8.2
Price Earnings Ratio	29.46
Price To FCF	38.62
Price To sales	8.86
EV / EBITDA	17.49

2. Meta's Q4 2025 Earnings: A Strong Finish to a Year of AI Rebuilding

Meta reported a robust Q4 2025, with total family of apps revenue reaching $58.9 billion, up 25% year over year, and Q4 family of apps ad revenue of $58.1 billion, up 24%. The company's EPS came in at $8.88, beating estimates of $8.19. Reality Labs segment Q4 revenue was $955 million, down 12% year over year. The company's cash and marketable securities stood at $81.6 billion, while debt was $58.7 billion.

Publication Date: Feb -02

                                    📋 Highlights
                                    Q4 Revenue Growth::
                                                Total family of apps revenue reached $58.9 billion (+25% YoY), with ad revenue at $58.1 billion (+24% YoY).
Reality Labs Performance::
                                                Q4 revenue fell to $955 million (-12% YoY), reflecting ongoing challenges in the metaverse segment.
AI Investment Priorities::
                                                $115–135 billion in 2026 capital expenditures, focused on AI infrastructure and Meta Superintelligence Labs.
Financial Position::
                                                Ended Q4 with $81.6 billion in cash and marketable securities, but $58.7 billion in debt, signaling high leverage.
2026 Outlook::
                                                Revenue guidance of $53.5–56.5 billion for Q1 2026, with full-year operating income expected to exceed 2025 levels despite $162–169 billion in expenses.

                                

Segment Performance

Susan Li discussed the company's segment results, stating that the community across the family of apps continues to grow, with over 3.5 billion people using at least one of the apps daily. The company is focused on delivering engaging experiences and increasing monetization efficiency. Investments in AI-native tooling are expected to drive growth, with a focus on building the best place for individuals to make a massive impact.

AI-Driven Growth

The company is investing in AI-driven performance gains, including scaling complexity and training data, making systems more responsive to real-time interests, and incorporating LLMs for personalized recommendations. Meta is also developing new model architectures and leveraging LLMs to infer people's interests. As Mark Zuckerberg noted, "2026 will be a year of AI acceleration, with Meta rebuilding its AI program foundations in 2025 and planning to ship new models and products."

Valuation Metrics

Meta's current valuation metrics indicate a 'P/E Ratio' of 29.88, 'P/S Ratio' of 8.99, and 'EV/EBITDA' of 17.74. The 'ROE (%)' stands at 30.56, and 'ROIC (%)' is 17.95. These metrics suggest that the market is pricing in significant growth expectations, and the company's ability to deliver on its AI-driven strategy will be crucial in justifying its current valuation.

Outlook and Guidance

Meta's financial outlook for the first quarter of 2026 expects total revenue to be in the range of $53.5 billion to $56.5 billion. The company will continue to prioritize investing in the business, maintaining long-term flexibility, and adapting to market developments. Analysts estimate next year's revenue growth at 18.0%, indicating a continued strong performance.

Investment Implications

The company's focus on AI-driven growth, combined with its strong financial performance, positions Meta for continued success. As the company invests in its AI infrastructure and talent, it is likely to drive further growth and expansion into new areas, such as subscriptions and licensing cloud models. With a strong track record of building personalized experiences, Meta is well-placed to capitalize on the growing demand for AI-driven services.

3. NewsRoom

Meta Emerges as Top Pick Among Magnificent Seven Stocks for 2026

Feb -02

Source: 247wallst.com

2 Unstoppable "Magnificent Seven" Growth Stocks to Buy Even if There's a Stock Market Sell-Off in 2026

Feb -02

Source: fool.com

Meta Platforms: Pounding The Table After A 'Grand Slam' Quarter

Feb -02

Source: seekingalpha.com

Meta's Ad Engine Powers Growth Despite Soaring Costs: Analyst

Feb -02

Source: benzinga.com

1 Big Surprise From Meta Platforms' Earnings

Feb -02

Source: fool.com

AI Capex Clouds The Tech Horizon, Even As Meta And Tesla Shine

Feb -02

Source: seekingalpha.com

Meta's Valuation Needs A Reality Check

Feb -02

Source: seekingalpha.com

Oracle and Meta Took a ‘Give It to Me Straight’ Tack on AI Spending. Google and Amazon Should Too.

Feb -02

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.49%)

6. Segments

Family of Apps

Expected Growth: 13.4%

Growing demand for digital advertising, increasing user engagement on Meta's suite of social media applications, and expansion into new markets drive growth.

Reality Labs

Expected Growth: 20.5%

Virtual reality products are poised for growth driven by increasing adoption in gaming and enterprise sectors. Meta Platform's investment in Reality Labs will further boost innovation, leading to increased market share and revenue growth.

7. Detailed Products

Facebook

A social networking platform that allows users to connect with friends, family, and other people who share similar interests.

Instagram

A photo and video-sharing social networking platform that allows users to share content and engage with others.

A messaging app that allows users to send messages, make voice and video calls, and share media.

Messenger

A messaging platform that allows users to communicate with friends and businesses.

Oculus

A virtual reality technology company that develops and manufactures VR hardware and software.

Workplace

A platform that allows teams to collaborate and communicate through groups, messaging, and video conferencing.

Portal

A series of smart display devices that allow users to make video calls, control smart home devices, and access information.

Facebook Marketplace

A platform that allows users to buy and sell goods and services within their local communities.

Facebook Dating

A dating platform that allows users to create a dating profile, match with others, and engage in conversations.

8. Meta Platforms, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Meta Platforms, Inc. has a medium threat of substitutes due to the presence of alternative social media platforms and online advertising channels. However, the company's strong brand recognition and large user base mitigate this threat to some extent.

Bargaining Power Of Customers

Meta Platforms, Inc. has a low bargaining power of customers due to its dominant position in the social media and online advertising markets. The company's large user base and diversified revenue streams reduce the bargaining power of individual customers.

Bargaining Power Of Suppliers

Meta Platforms, Inc. has a low bargaining power of suppliers due to its significant scale and negotiating power. The company's large advertising revenue and diversified supplier base reduce the bargaining power of individual suppliers.

Threat Of New Entrants

Meta Platforms, Inc. has a low threat of new entrants due to the high barriers to entry in the social media and online advertising markets. The company's strong brand recognition, large user base, and significant investments in technology and infrastructure make it difficult for new entrants to compete.

Intensity Of Rivalry

Meta Platforms, Inc. operates in a highly competitive industry with intense rivalry among established players. The company faces significant competition from other social media platforms, online advertising companies, and emerging technologies.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	19.56%
Debt Cost	3.95%
Equity Weight	80.44%
Equity Cost	9.97%
WACC	8.79%
Leverage	24.31%

11. Quality Control: Meta Platforms, Inc. passed 8 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

AT&T

A-Score: 7.0/10

Value: 7.5

Growth: 2.6

Quality: 5.5

Yield: 9.0

Momentum: 8.0

Volatility: 9.7

1-Year Total Return ->

Alphabet

A-Score: 5.8/10

Value: 1.0

Growth: 8.2

Quality: 8.2

Yield: 0.0

Momentum: 10.0

Volatility: 7.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

14.72%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.79%

Meta Platforms, Inc. - US30303M1027

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on META

1.c. Company Highlights

Better Quality

Higher Growth

Expensive

Earnings Beats

Revenues Beats

2. Meta's Q4 2025 Earnings: A Strong Finish to a Year of AI Rebuilding

Segment Performance

AI-Driven Growth

Valuation Metrics

Outlook and Guidance

Investment Implications

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.49%)

6. Segments

Family of Apps

Expected Growth: 13.4%

Reality Labs

Expected Growth: 20.5%

7. Detailed Products

Facebook

Instagram

WhatsApp

Messenger

Oculus

Workplace

Portal

Facebook Marketplace

Facebook Dating

8. Meta Platforms, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Meta Platforms, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

706.41$

Current Price

706.41$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA