Meta Platforms, Inc. develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, wearables, and in-home devices worldwide. It operates in two segments, Family of Apps and Reality Labs. I review Meta’s business, look at its key ratios, and derive the intrinsic value using Discounted Cash Flow (DCF) analysis. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
I review various key ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), Days Sales Outstanding (DSO), Days Inventory, Payable Period, Cash Conversion Cycle, Inventory Turnover, etc.
After taking into account Meta’s 2021 free cash flow of $39,116 million figure, a 5% growth rate of FCF (growth for the next 10 years), 10% discount rate, 3.23% long term growth rate (growth from 10 year mark in the future to perpetuity), 2,824 million shares outstanding, and $0 million of long term debt, the DCF analysis yields us an intrinsic value of $234.81 per share.
0:23 Business Overview
5:15 Key Ratios Analysis
13:07 Discounted Cash Flow Analysis / Intrinsic Value
Meta’s Website: here.
Morningstar Key Statistics Link: here.
Useful Resources here.
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