Opinions
Jason Del Vicario
Meta Platforms Inc
META-Q
COMMENT
Sep 18, 2017
Stock price when the opinion was issued
You might be interested:
Like every chart, taken lumps over last little while. Back to doing great things after stepping away from the metaverse. Tariffs may affect it around the edges, but not at its core. 1 in 2 people in the world uses a META product every day. Multiple is not challenging. Yield is 0.41%.
Management issues seem contained. Regulatory issues will always come up. Interestingly, EU-announced tariffs didn't touch communication services companies, which is different from past practices.
Sold off massively, but it and its peers can still own the world. Billions of dollars from advertising. CEO has proven to be one of the great internet entrepreneurs. Trading at 20x PE, an unbelievable multiple for a company that could grow 10-15% for the next decade. Big long-term story on AI. Yield is 0.42%.
(Analysts’ price target is $729.19)Really good run into the inauguration, now fallen. Trial with the FTC over Instagram and WhatsApp is revealing all the dirty laundry, and that's hurting the stock. Not in China, not affected by tariffs. Already using AI in advertising.
Buying here won't hurt you if you have a long-term view. Or, you could try to get it cheaper on all the volatility.
A month ago, he reduced his tech holdings a lot. Thirst for AI continues pretty strong. Economic environment would have to be pretty tough for this name to go down too much more, but that could happen.
Both names are great. MSFT is a bit more expensive. META can suffer more on advertising if we go into a tougher economic environment. If you're confident that Trump wants to win the midterms and wants to be popular, and that we're going to avoid the worst-case outcome, you can buy both at these levels. Between the two, META gets the nod.
Expects this type of volatility until the fall, and then the whole Trump administration will get into campaign mode for the mid-terms. One of his top 5 holdings, and has been for ages. So many horses in the race, which they've learned how to monetize. 12-month price target of $805, about 28-29% runway.
Between GOOG and META, he'd go 50/50.
Doesn't own, but respects the name. Pretty decent valuation. Technicals look strong. One step away from breaking previous all-time highs at $740. Paying 27x forward PE for 15% growth, not a bad PEG ratio. Cornering the whole social media space. Watch out for what it's spending on the Metaverse.
$1,000 in 5-10 years?An ROE over the long-term should also predict the movement of the stock price. For example, if a company has an ROE of 20%, they are increasing the value of the shareholder equity by 20% a year. 20% compounded over a ten-year period actually leads to a fivefold increase in the equity which, theoretically, should also lead to a fivefold increase in the stock price. If you were to multiply the current stock price of this by 5, that gets you relatively close to $1000. However, he doesn’t think it gets to $1000 over the next 5 years, but if they are able to achieve those ROE’s that they have in the past, it wouldn’t shock him. Thinks their runway for growth is long and very good.