BY MARK SEBASTIAN
January 20, 2025
Relative to most of the mag 7 names…META might be cheap.
It is carrying a PE of 27…really high for a 1.5 trillion dollar company…until you look at the other names in the mag 7.
AAPL PE: 35
NVDA: 52
MSFT: 34
GOOGL: 25
AMZN: 47
TSLA: 108
Meta has huge revenue of 156 billion dollars and growing…mostly from instagram….
Whatsapp is HUGE for international communication and they have not really figured out how to monetize it well…so there is massive upside there.
The issue with META is its former name…Facebook….
I am on it…you are probably on it…my kids…your kids…probably not….
It is a huge driver of revenue and earnings for them and yet…young people are not flocking to this site.
I am old enough to remember when Facebook was cool…when I joined…I had to use my college email address (i was close enough to having graduated that my old email was still active).
But now…who is on that platform…still me…and you…not our kids…
That is the risk…can they continue to grow Insta…monetize Whatsapp…while milking Facebook to its slow grave…
My take…at a 27 PE relative to AAPL and MSFT its a better buy…I like it in the mid 500s.
I am sorry but before I begin my chart analysis on Meta Platforms (Ticker: META) may I just ask:
Why is Mark Zuckerberg just telling us now how the U.S. government harangued his company on certain topics on his platform??
Way after the fact?
Does he think he is a hero now?
I would have waaayy more respect for him if he had told us all this while it was happening.
No guts … coward!
Sorry, I may get in trouble for that but come on!!!
Better late than never, I guess.
Back to business.
Here is my META chart which follows the pitchfork very nicely going back to July 25th:
The stock is now testing that lowest support level trading back into the pitchfork which comes in at $608.50 and below there at $594 and $484.
Resistance is up at $617 and $632.
MACD is trying its best to turn bullish.
The chart looks like it wants to continue its march higher.
META IV getting bid
I did read something that folks cannot do without MSFT, GOOGL, or AAPL but can do without META. For me, I don’t login to Facebook anymore and basically think it is a waste of time but it is a way to keep up with folks. Those folks are still flocking as it has become the town hall for communities all over the globe.
That is what has kept the popularity going, maybe that and photos on Instagram. The growth is still amazing even if it is not my cup of tea.
1 year chart with 30 day IVs
META flew on the possibility of a Tiktok ban and just this week has cooled after a big run. META will be the long term winner. Longer term IV does provide some value but the short term IVs are setting up for a big move. The stock is at an all time high and IVs in the short term are right there.
30, 60 and 90 day IVs
I think long term calls do not look too bad. The IVs are not that high. META has continued to use AI to its advantage and shows no signs of slowing down. Zuck knows how to pivot quickly when he needs to.
The word “META”. It sounds almost zen.. but it comes from the Greek prefix and preposition that means “beyond”. Which may be a part of how I would describe Meta Platforms: it has had an adoption rate that is beyond belief, beyond compare, and beyond dispute. It has reported that 3.29 billion people were using at least one of its core products every day. That’s a pretty large chunk of the entire planet and up from 2 billion in 2018.
And as a result, it is quite simply… a revenue juggernaut. And ad machine. And one of my favorite companies at using artificial intelligence (A.I.) to actually make money now. It laughs at companies that are hoping to figure out how to utilize A.I. – it has been successfully doing that very thing for the better part of 15 years – slicing and dicing our data in a thousand different ways in order to help companies sell us everything under the sun.
In the A.I. arms race, he who has the most data wins.
Result? Its free cash flow was $52.24 billion in the period ending last September. That is up 39.05% from the same period in the previous year.
Yes, it has had its controversies. Yes, its leader is a bit annoying. But man can that company execute. It makes money. Gobs of it. And that makes me a fan, because I’m a also a fan of making money.
I think that in both good and bad times Meta will thrive. Is it subject to cyclicality? Sure, but the way things are going, if times get tough advertisers should shift their budgets to the most effective platform out there – Meta. Win-win.
Now, as an investor, I might be a little nervous about all this Tik Tok talk, but only on a short-term basis. The overall market has been nervous as well, with Magnificent 7 stocks taking a breather after a massive run versus value names.
Earnings are coming up shortly but volatility levels are nice and juiced in general. A holder of META could sell the February 685 call for approximately $9.10, representing 1.9% of the stock’s value for 35 days of work. Including the potential run from 611 to the strike price of 685 we are looking at a call-away return of close to 14%. Not too shabby. And beyond cool for income traders.
Sometimes you just have to hop on the bus, ride the coattails, hit the gravy train, read the tea leaves, etc., etc.
And that is exactly what Mark Zuckerberg has done.
Zuck initially championed Facebook/META as a platform for free expression, emphasizing its role as a digital public square where diverse views could flourish.
He argued that censoring political speech, even controversial or polarizing content, would undermine democratic dialogue and prevent users from forming their own opinions.
This commitment to free speech was tested during Trump’s presidency, as Facebook/META faced mounting criticism for allowing divisive rhetoric to spread on its platform.
His stance began to shift under increasing pressure from advertisers, civil rights groups, and employees who argued that Facebook’s policies were enabling harm and undermining democratic values.
He turned META into the poster child of censorship.
He got sued.
He won.
It is, after all, a private platform.
With Trump back in office, Zuck has again become a “free speech” advocate.
Does he truly believe it?
Who knows … but he knows that the new administration and its supporters believe it … and that will be good for META business.
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