Due to the widespread popularity of its social media applications, Meta Platforms ( META 2.01% ) It is considered one of the most influential companies globally and has proven to be a highly profitable investment opportunity. Over the last ten years, the stock prices have increased by 609%, transforming a $10,000 investment into nearly $71,000 at present.
At the time of writing this, Meta holds a market cap With an approximate value of $1.3 trillion and a revenue of $150 billion in the past year, the question arises whether it is still a good time to invest in this “XYZ” company. Seven magnificent individuals ” stock?
What could be disliked about it?
To address this inquiry, investors need to dedicate time to grasp all the positive attributes that this company has. There are several characteristics worth noting that indicate Meta is a top-notch business.
The company is currently and will continue to profit from the widespread long-term trend of the growth of digital advertising. This is due to the increasing use of the internet and smartphones, leading to more users spending more time online. As a result, there is a vast and continuously growing digital space that Meta can generate revenue from.
The revenue for the second quarter of 2024, which ended on June 30, reached an impressive $39.1 billion, marking a remarkable 136% increase compared to the same period five years ago. Furthermore, there are expected to be further growth opportunities as the global digital advertising market is projected to grow at a compound annual rate of 15.5% until the end of the decade.
Meta is extremely lucrative as well. In the last quarter, its overall operating margin was an impressive 38%. The apps segment, which makes up 99% of the company’s sales, stands out with an operating margin of 50%.
Generating free cash flow has been a simple task for Meta, which obtained $23.4 billion in revenue during the initial half of this year. The company is overseen by its founder and CEO. The name of the individual in question is Mark Zuckerberg. The money is directed towards purchasing company shares and paying out dividends, which enhances the profits for shareholders.
Due to Meta’s established leadership in the technology and online industries, it is well-positioned to become a leader in other areas as well. a frontrunner in the field of artificial intelligence New features have already been launched, and Meta is not hesitating to keep investing significantly in this new technology.
Meta AI is a chatbot assistant that is capable of responding to a range of user inquiries and also has the ability to generate images. Moreover, Meta is also focusing on catering to advertisers. Mark Zuckerberg mentioned during the Q2 2024 earnings call that in the future, advertisers will only need to provide Meta with their business goals and budget, and Meta will take care of the rest.
Enhancing the effectiveness of key stakeholders with AI tools can contribute to boosting the company’s competitive advantage.
When it comes to competitive advantage, Meta could have one of the most robust economic advantages globally due to the network effects it enjoys. An astounding 3.27 billion individuals utilize Meta’s social media platforms on a daily basis. The widespread usage of these apps is driven by the fact that everyone’s acquaintances use them, resulting in remarkable user engagement that advertisers find highly appealing.
Investing in Meta is a wise choice.
As Meta stands as one of the most valuable companies globally, investors may be questioning if they have missed out on the opportunity. If shares were purchased years ago, significant returns would have been realized in your investment portfolio.
Nevertheless, I believe Meta is a strong choice for investment at the present moment. With a forward price-to-earnings ratio of 24.4, Meta is the second most affordable company among the “Magnificent Seven” based on this valuation measure, which is a positive sign.
Investors need to take into account the company’s future potential, especially in terms of its profitability. Analysts on Wall Street predict that Meta’s earnings per share (EPS) will grow by an average of 23% annually from 2023 to 2026. Moreover, it is likely that the company will continue to achieve double-digit EPS growth annually in the following years.
I believe that there is still an opportunity to invest in Meta. For individuals interested in acquiring a leading company focused on artificial intelligence, with promising growth prospects, substantial profits, and network advantages, this is a clear and logical choice.
