Meta-Sized Opportunity

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top +5% Dividend Value Stock Searches in the Last Month Rank Ticker Name Searches #1 [TSLA]( Tesla Inc 370 #2 [NVDA]( Nvidia Corp 331 #3 [AAPL]( Apple Inc 266 #4 [AMZN]( Amazon.com Inc 144 #5 [META]( Meta Platforms Inc. 134 #ad [Decoding Your Finances: The Juice Edition]( Brought to you by [Stansberry Research]( [Wall Street legend warns: “A new dawn is coming”]( [Stansberry Research - Wall Street legend warns: “A new dawn is coming”]( CNBC's Jim Cramer once said: "I learned a long time ago not to be on the other side of a Chaikin trade." Since Chaikin accurately predicted the 2012 Priceline collapse, the 2020 crash, and the 2022 bear market, over 1 million people have chosen to follow his Wall Street warnings. Today he's stepping forward with a new warning – one he's never shared with the hedge funds, banks, and brokerages he worked with over 50 years on Wall Street. "A new dawn is coming to the U.S. stock market," says Chaikin, who's traded through nine bear markets. "It's time to throw out the investment blueprint of the last decade and prepare for a massive shift." [Click here to access his new warning, and #1 stock recommendation.]( Should You Hold Meta (META)? Meta Platforms (META) kicked off tech earnings last week with a resounding thud. Shares have risen 500% since late 2022. Yet, despite beating on the top and bottom line, shares of the Facebook giant dropped almost 20%. We’ve been a fan of Meta for a while. But the pullback doesn’t surprise us, especially given the tepid revenue guidance for Q2. But does this provide an opportunity to pick up shares on the cheap or is there more pain ahead? Meta’s Business Most of us know Meta as the parent company behind Facebook. The company rebranded to Meta as CEO Mark Zuckerberg planned to expand into the “Metaverse” and AI technology. Yet, its social media platforms, led by Facebook, Instagram, WhatsApp, and Threads are the heart and soul of the company. Despite lower revenue guidance and heavy market saturation, Meta continues to see the number of active users grow steadily. [Daily active] [Source: Meta Q1 2024 Earnings Presentation]( The issue comes from lower ad spend, which was exceptionally strong in Q4 last year. [Revenue] [Source: Meta Q1 2024 Earnings Presentation]( Meta’s Q2 revenue guidance of $36-$39 billion is higher than Q2 2023 but is more tepid than the growth numbers many expected. Financials [Financials] Source: Stock Analysis Even with a sales decline in 2022, Meta has still managed to average close to 20% revenue growth for the past 3-5 years. At the same time, it kept margins steady while increasing free cash flow. This led the company to issue its first-ever dividend on top of its regular share buybacks. The company spends half its operating cash flow on share repurchases each year, yielding roughly 2.8% annually. Management plans to spend another $35-$40 billion in 2024 on long-term investments in AI infrastructure, which they see expanding in the coming years. Valuation [Valuation] Source: Seeking Alpha With its recent pullback, Meta is cheaper than every other mega tech company on our list by a substantial margin. Its P/E ratio is roughly half that of its peers, except for Apple (AAPL). On a price-to-cash flow basis, Meta trades at just 14.7x, which is exceptionally cheap. Growth [Revnue] Source: Seeking Alpha Although it’s relatively cheap, Meta’s revenue growth is phenomenal. While its CAGR over the 3-5 year lookback period isn’t as high as Tesla (TSLA) or Nvidia (NVDA), it easily matches Apple’s and Amazon’s (AMZN). And of the group, only Nvidia beats it in CAGR free-cash-flow growth. Profitability [Profits] Source: Seeking Alpha Meta also boasts some of the best margins outside of Nvidia. That’s helped it deliver consistent returns on equity, assets, and total capital. [Beyond Traditional Investments: Embrace Diversity]( Don't limit your investment horizons to stocks alone. Venture into the realm of AI, Real Estate, Private Equity, NFTs, and more! Our financial experts curate a diverse range of alternative investment content. [Sign up for FREE and broaden your investment knowledge with The Alt.]( Our Opinion 9/10 It’s hard to be bearish on Meta. The company still expects double-digit revenue growth in 2024. Plus, it generates huge amounts of cash that it returns to shareholders and invests in its future. We see the latest pullback as an opportunity, not a reason to be afraid. 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