Better Social Media Stock: Trump Media vs. Meta Platforms

Core Insights - Trump Media & Technology Group and Meta Platforms represent different investment approaches in the social media sector, with Trump Media focusing on a niche conservative audience through Truth Social, while Meta is the market leader with a diverse portfolio including Facebook, Instagram, Messenger, and WhatsApp [1][2] Performance Comparison - Over the past 12 months, Trump Media's stock increased by 95%, while Meta's stock rose by 73%, both outperforming the S&P 500's 24% gain [2] - Trump Media generated $4.1 million in revenue in 2023 but reported a net loss of $58.2 million, with a widening net loss to $363.2 million in the first nine months of 2024 despite generating $2.6 million in revenue [5] - Meta's revenue grew by 16% to $134.9 billion in 2023, with net income increasing by 69% to $39.1 billion, and in the first nine months of 2024, revenue rose by 22% year over year to $116.1 billion, with net income up 66% to $41.5 billion [7] User Engagement and Growth - Truth Social had approximately 76,463 daily active users in the U.S. as of May 2024, with an average of 4 million monthly visits from May 2023 to April 2024 [3] - Meta's daily active users across its core apps grew by 5% year over year to 3.29 billion, with ad impressions increasing by 7% and average ad prices rising by 11% [4] Financial Health and Valuation - Trump Media's enterprise value is $6.7 billion, which is considered overvalued at more than 1,600 times last year's sales, with a significant increase in share count by nearly 60% since its SPAC-backed debut [6] - Meta held $70.9 billion in cash, cash equivalents, and marketable securities at the end of the third quarter, and has been able to buy back 11% of its shares over the past five years [7] Future Outlook - Analysts expect Meta's revenue and earnings per share to grow by 21% and 52%, respectively, with the stock appearing reasonably valued at 8 times next year's sales and 24 times forward earnings [8] - Meta's ad sales have benefited from a stabilized macro environment and increased spending from Chinese gaming and e-commerce companies, alongside the expansion of its Reels platform [9] Investment Recommendation - Meta is considered a safer investment compared to Trump Media, which is viewed as a volatile stock driven by short-term trading rather than core business improvements [10]