Introduction
Meta platforms, Inc.(META) report financial results for two segments: Family of Apps (FoA) and Reality Labs (RL). Currently, the company generate substantially all of its revenue from selling advertising placements on its family of apps to marketers, which is reflected in FoA. Ads on its platform enable marketers to reach people across a range of marketing objectives, such as generating leads or driving awareness. Marketers purchase ads that can appear in multiple places including on Facebook, Instagram, Messenger, and third-party applications and websites. RL generates revenue from sales of consumer hardware products, software, and content.
Family of Apps Products
Facebook. Facebook helps give people the power to build community and bring the world closer together. It’s a place for people to share life’s moments and discuss what’s happening, nurture and build relationships, discover and connect to interests, and create economic opportunity. They can do this through Feed, Reels, Stories, Groups, Marketplace, and more.
Instagram. Instagram brings people closer to the people and things they love. Instagram Feed, Stories, Reels, Live, and messaging are places where people and creators can connect and express themselves through photos, video, and private messaging, and discover and shop from their favorite businesses.
Messenger. Messenger is a simple yet powerful messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls.
Threads. Threads is an application for text-based updates and public conversations, where communities come together to discuss topics of interest. People can connect directly with their favorite creators and others who love the same things or build a loyal following of their own to share their ideas, opinions, and creativity with the world.
WhatsApp. WhatsApp is a simple, reliable, and secure messaging application that is used by people and businesses around the world to communicate and transact in a private way. Within WhatsApp they launched WhatsApp Channels, a one-to-many broadcast service designed to help people follow information from people and organizations that are important to them.
Reality Labs Products
Many of its metaverse investments are directed toward long-term, cutting-edge research and development for products that are not on the market today and may only be fully realized in the next decade. This includes exploring new technologies such as neural interfaces using electromyography, which lets people control their devices using neuromuscular signals, as well as innovations in AI and hardware to help build next-generation interfaces. In the near term, they are continuing to develop early metaverse experiences through Reality Labs products that help people feel connected, anytime, anywhere.(from annual report for 2023)
Profitability analysis
Meta platforms, Inc.(META)’s revenue reached $134.9 billion in 2023,a increase of 15.7%,compared with $116.6 billion in 2022.
Net income was $39 billion, $23.2 billion and $39.3billion for 2023,for 2022 and for 2021,respectively.
The net profit rate was 28.9%, 19.9% and 33.3% in 2023, in 2022 and in 2021,respectively.
We could see that the company has raked money very much.
Meta platforms, Inc.(META) have two reportable segment: Family of Apps and Reality Labs.
If it had not Reality Labs business, the company would make more money.
Family of Apps’ s income from operations was $62.8 billion in 2023, while Reality Labs’ s loss from operations was $16.1 billion in 2023.
Revenue disaggregated by geography, based on the addresses of our customers, consists of the following (in millions):
| Year Ended December 31, | |||||||||||
| 2023 | 2022 | 2021 | |||||||||
| United States and Canada (1) | $ | 52,888 | $ | 50,150 | $ | 51,541 | |||||
| Europe (3) | 31,210 | 26,681 | 29,057 | ||||||||
| Asia-Pacific (2) | 36,154 | 27,760 | 26,739 | ||||||||
| Rest of World (3) | 14,650 | 12,018 | 10,592 | ||||||||
| Total revenue | $ | 134,902 | $ | 116,609 | $ | 117,929 | |||||
Liquidity and solvency analysis
Total asset was $229.6 billion and total liabilities were $76.45 billion in 2023.
The debt ratio was 33.3% in 2023.
Meta platforms, Inc.(META) have sufficient cash, because cash and cash equivalents were $41.8 billion ,marketable securities were $23.5 billion and total current liabilities only had $31.9 billion as of December 31,2023.
Cash flows analysis
Net cash provided by operating activities was $71.1 billion, $50.4 billion and $57.6 billion in 2023,in 2022 and in 2021,respectively.
As you see that the firm have strong cash flow, and it is a cash cow.
The free cash flow was $43.9 billion, 19 billion and 39 billion in 2023, in 2022 and in 2021, respectively.
There is a uncertainty regarding capital expenditure ,which impact on valuing company .
Repurchases of Class A common stock were $19.7 billion, $27.9 billion and $44.5 billion in 2023,in 2022 and in 2021,respectively, which indicate that the company has returned to shareholder through repurchasing stock.
Summary
We reckon that $700 billion or $274.6 per share is a good buy point, namely about 15 times price-to-earnings ratio.
The users in US and Canada was more valuable than other areas. Winning the U.S. market means winning the world.
Alphabet (GOOGL,GOOG): Is Google overestimated ? How about 1.2 trillion ?