Meta Platforms, Inc. (META): Our Calculation of Intrinsic Value

Core Insights - Meta Platforms, Inc. is a leading social technology company with a diverse app portfolio and a strong presence in digital advertising, focusing on AI and metaverse investments [2][3] - The company has transitioned from user growth to efficiency and profitability, achieving record margins and free cash flow while investing in long-term projects [3] - The DCF analysis indicates an intrinsic value per share of approximately $333, while the current market price is around $667, suggesting a significant margin of safety [5][6] Company Profile - Meta operates a family of apps including Facebook, Instagram, WhatsApp, and Messenger, with over 3 billion users [2] - The company is heavily investing in AI-driven engagement and virtual reality, positioning itself for future growth [2] Financial Analysis - DCF inputs include a discount rate of 10% and a terminal growth rate of 3% [4] - Forecasted free cash flows from 2025 to 2029 show a total present value of $218.9 billion, with a terminal value of $943.4 billion leading to an enterprise value of $813.9 billion [4] - Meta has a net cash position of $28.8 billion, resulting in an equity value of $842.7 billion [5] Valuation Insights - The intrinsic value per share is calculated at approximately $333, while the current price is about $667, indicating a 50% margin of safety [5] - The market seems to be pricing in expectations of sustained double-digit growth and further operational leverage [6] - Despite being a strong long-term investment, the current valuation does not present a deep-value opportunity [6]