Meta Platforms(US:META) Zhao Yin Guo Ji·2024-08-02 10:23Investment Rating - The report maintains a "Buy" rating for Meta with a target price of $565.00, reflecting a 5% increase from the previous target price of $542.00 [4][15]. Core Insights - Meta reported a 22% year-over-year revenue growth in Q2 2024, reaching $39.1 billion, exceeding Bloomberg's consensus estimate by 2% [1]. - Net income increased by 73% year-over-year to $13.5 billion, surpassing expectations by 10%, primarily due to effective cost control related to employee expenses [1]. - For Q3 2024, management anticipates revenue growth of 13-20%, aligning closely with consensus expectations despite high base effects [1]. - The report highlights strong advertising demand across verticals, particularly in online commerce, gaming, and entertainment, contributing to a 22% increase in advertising revenue [1]. - The introduction of AI initiatives, such as Meta AI and AI Studio, is expected to enhance user experience and create monetization opportunities [1]. Financial Summary - Revenue projections for FY24, FY25, and FY26 have been increased by 1-2% [1]. - Operating profit margin (OPM) rose by 9 percentage points year-over-year to 38.0% in Q2 2024, driven by lower marketing and restructuring costs [1]. - FY24 capital expenditures are projected to grow by 36-47% year-over-year, reaching $37-40 billion [1]. - The report forecasts a compound annual growth rate (CAGR) of 21% for net income from FY24 to FY26 [1][19]. Valuation Metrics - The estimated P/E ratio for FY24 is 27x, with a target price of $565.00 per share, which is above the industry average of 22x [4][18]. - The report indicates that the current valuation at 20x FY25E P/E remains attractive [1]. Revenue and Profitability Forecasts - Revenue is expected to reach $159.7 billion in FY24E, with net income projected at $53.1 billion [3][19]. - The report anticipates a stable gross margin of 81.0% and an operating margin of 38.6% for FY24E [3][19]. Shareholder Structure - Mark Zuckerberg holds 14.0% of the equity, while Vanguard Group holds 6.9% [2].