Meta Platforms, Inc. (META)
POSITIVEFundamental
80
Price
$565.93
Market Cap
$1.42T
Part 1 · What the company is worth
Overview
Meta owns Facebook, Instagram, WhatsApp and Messenger, apps used by billions of people to connect, share and message, and makes almost all of its money by selling advertising space inside them. It doesn't charge users directly; instead it uses the data generated by their activity to show ads it can target precisely, and charges advertisers for that precision. A much smaller, loss-making division, Reality Labs, builds virtual- and augmented-reality headsets and is Meta's bet on a future computing platform beyond the smartphone.
How it makes money
Meta earns revenue almost entirely from advertisers who pay per ad impression or click, with price set by an auction where advertisers bid for placement in front of the specific audiences Meta's data lets them target. Because the marginal cost of showing one more ad to an existing user is close to zero, revenue growth flows through to profit at a very high rate. Reality Labs, by contrast, sells hardware and software at a steep loss, funded by the advertising business, as an investment in becoming the next computing platform.
Revenue by segment
Advertising sold across Facebook, Instagram, WhatsApp and Messenger — nearly all of Meta's revenue.
Virtual- and augmented-reality hardware, software and content, sold at a large ongoing loss.
Competitive moat
Network effects · WideFacebook, Instagram and WhatsApp are valuable to any one user largely because everyone else is already there — friends, family and businesses — which makes a new social app hard to displace once a critical mass of users has settled on the incumbent. That same scale of users and data lets Meta's ad-targeting outperform smaller rivals, reinforcing why advertisers keep spending there even as new platforms like TikTok compete for attention.
What drives demand
CyclicalAdvertising budgets are one of the first costs companies cut when the economy slows and one of the first they restore in a recovery, so Meta's revenue tends to track the broader advertising and economic cycle more than any product-specific trend. User growth and engagement are comparatively stable; it is advertiser spending, not audience size, that swings with the cycle.
Key risks
- Regulation of data and advertising — The EU's Digital Markets Act, online-safety laws and similar rules elsewhere keep restricting how Meta can collect and use data for ad targeting, with potential fines and forced changes to its ad business.
- Near-total reliance on advertising — Almost all revenue comes from advertising and depends on data signals and mobile operating systems Meta does not control, such as changes Apple has made to privacy settings that limit ad targeting.
- Competition for user attention — Platforms such as TikTok compete directly for the time users spend on their phones, and losing engagement would eventually reduce the audience Meta sells to advertisers.
- Reality Labs losses — Reality Labs lost more than $16 billion in operating income in fiscal 2025 alone, and Meta expects the division to keep losing money for the foreseeable future with no guarantee the bet pays off.
The case for
Buyers argue that the network effect binding billions of users to Facebook, Instagram and WhatsApp is very hard for a new entrant to break, that advertising margins are extremely high once the platform is built, and that heavy AI investment is improving ad targeting and engagement faster than competitors can match.
The case against
Sellers worry that nearly all revenue depends on advertising, one of the first budgets companies cut in a downturn, that regulators in Europe and elsewhere keep restricting the data-driven targeting the ad business relies on, and that Reality Labs has lost over $16 billion in a single year with still no clear sign the bet on a new computing platform will pay off.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
No editorial profile for this company yet
No competitor list for this company yet.
Balance Sheet & Liquidity
Revenue
$228.25B
Trailing 12 months (through 6/30/2026)
Net Income
$68.10B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$46.11B
Total Equity
$217.24B
Total Liabilities
$148.78B
Current Ratio
2.23
Interest Coverage
71.48
Debt/EBITDA
1.10
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$620.13
Current Price
$565.93
Margin of Safety
+8.7%
Fair Value Range
$403.09 - $837.18
Estimation Methods
Valuation Metrics
P/E Ratio
21.06
ROE
27.8%
P/B Ratio
-
P/FCF
-
Gross Margin
81.7%
ROIC
17.4%
Profitability Radar
Value Creation (Economic Moat)
ROIC
17.4%
WACC
10.5%
ROIC − WACC
+7.0 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (20)
- EPS shows upward trend
- EPS CAGR 34.35%
- Price CAGR 16.94%
- ROIC 17.4%
- Gross Margin 81.7%
- Debt/Equity ratio
- Operating Margin 38.1%
- Positive Free Cash Flow
- Current Ratio
- Interest Coverage
- Debt/EBITDA
- Return on Tangible Assets
- Low reliance on intangibles
- ROE 29.7%
- Revenue Growth 5Y 18.5%
- Analyst Consensus 87% Buy
- PEG Ratio 1.21
- Earnings Quality (OCF/NI) 1.91
- Share Dilution -1.5%
- Piotroski F-Score 5/9
Failed (4)
- CapEx intensity
- DCF valuation (Unknown)
- Earnings Surprise avg 0.4%
- Net Margin Trend 29.8% vs 40.0%
Unavailable (4)
- P/FCF NaN
- P/B Ratio NaN
- Dividend Payout NaN%
- Price below Graham Number
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Mark Elliot Zuckerberg | Founder, Chairman & CEO | 41 |
| Ms. Dina Powell McCormick | President & Vice Chairman | 51 |
| Ms. Susan J. S. Li | Chief Financial Officer | 39 |
| Mr. Javier Olivan | Chief Operating Officer | 48 |
| Mr. Andrew Bosworth | Chief Technology Officer | 43 |
| Mr. Christopher K. Cox | Chief Product Officer | 42 |
| Mr. Dana White | Independent Director | 55 |
| Mr. Aaron A. Anderson | Chief Accounting Officer | - |
| Mr. Atish Banerjea | Chief Information Officer | 59 |
| Mr. Henry T. A. Moniz | Chief Compliance Officer | 60 |
Audit Risk
9
Board Risk
10
Compensation Risk
10
Shareholder Rights Risk
10
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for META, sourced from Markets Gazette.
- 7h agoPOSITIVEWhy Meta’s stock could see a 50% rally, thanks to an overlooked AI wild card
Meta Platforms Inc. (META) may be poised for a significant rally, potentially reaching 50%, driven by an overlooked artificial intelligence factor. An ongoing shortage in compute capacity globally presents Meta with a unique opportunity to monetize its own substantial AI infrastructure. By selling excess compute power to other companies at a premium, Meta could unlock a new, high-margin revenue stream. This strategic move, leveraging its existing investments in AI hardware, could significantly boost its financial performance and investor valuation, especially as demand for AI processing power continues to surge.
- 5d agoNEGATIVEMeta’s Trial Adds a Trillion-Dollar Risk to Its Struggling Stock
Meta Platforms Inc. faces a new trial alleging its social media platforms engaged in predatory targeting of children. This legal challenge introduces significant existential risks to the company's core business, potentially overshadowing existing concerns about its substantial investments in artificial intelligence. The outcome could profoundly impact Meta's operational future and investor confidence, adding a trillion-dollar risk factor to its already pressured stock.
- 6d agoNEGATIVEMETA: "ha reso minori dipendenti e li ha sfruttati", al via maxi-processo (con tonfo in Borsa)
Meta Platforms is facing a major lawsuit in California, with the state's Deputy Attorney General Megan O'Neil accusing the company of 'making minors addicted and exploiting them' and 'deceiving' the public. The legal proceedings began with an opening statement detailing these allegations. This significant legal challenge, if successful, could lead to substantial fines and reputational damage for Meta, potentially impacting user engagement and advertiser confidence. Investors are closely watching the case's progression for any signs of financial or operational repercussions.
- 7d agoNEUTRALMeta is facing its ‘Big Tobacco’ moment — and investors can profit
Meta Platforms is reportedly facing a 'Big Tobacco' moment, with a landmark youth-safety trial potentially impacting its operations. However, the article suggests that even an adverse ruling would have minimal impact on Mark Zuckerberg's empire. This implies resilience in Meta's business model and its ability to weather significant legal challenges. For investors, this indicates that while risks exist, the core business may remain robust, potentially offering a stable investment despite ongoing controversies. The situation warrants close monitoring of legal developments and their actual financial repercussions.
- 7d agoNEGATIVERassegna serale: inizia il processo sulla sicurezza dei minori di Meta; petrolio in rialzo
Meta Platforms Inc. shares experienced a decline as the company faces a significant child safety trial. This legal challenge introduces considerable uncertainty and potential financial liabilities, overshadowing other market movements. Investors are closely monitoring the proceedings, which could impact future operations and regulatory standing. The news comes amidst broader market concerns including rising oil prices and Treasury yields, alongside geopolitical tensions, creating a complex environment for equity valuations. The ongoing trial is the primary driver for Meta's stock performance, suggesting a cautious outlook for the tech giant.
- 8d agoNEGATIVEMeta heads to child safety trial facing financial damages as large as $1.4 trillion
Meta Platforms is heading to a child safety trial with potential financial damages reaching up to $1.4 trillion, a figure that approaches the company's entire market capitalization. Four states are seeking these substantial penalties, but the more significant long-term threat lies in a potential court-ordered restructuring of how Facebook and Instagram operate for young users. This legal challenge could fundamentally alter Meta's business model and user engagement strategies, posing a considerable risk to future revenue streams and growth prospects.
- 15d agoNEUTRALMeta brandishes open-source AI models again, as Zuckerberg media blitz emphasizes battle against Chinese rivals
Meta Platforms is intensifying its open-source AI model strategy, with CEO Mark Zuckerberg highlighting a competitive push against Chinese rivals. This move aims to bolster Meta's position against established AI leaders like OpenAI and Anthropic, while also addressing the growing capabilities of Chinese open-source AI labs. The company's renewed focus on open-source development signals a strategic effort to democratize AI technology and foster broader adoption, potentially influencing the competitive landscape and Meta's long-term AI market share.
- 15d agoPOSITIVEMeta embraces open-source AI models again, as Zuckerberg media blitz emphasizes battle against Chinese rivals
Meta Platforms is doubling down on open-source AI models, a strategic move highlighted by CEO Mark Zuckerberg's recent media push emphasizing competition with Chinese rivals. This renewed commitment to open-source AI aims to accelerate innovation and foster a collaborative ecosystem, potentially allowing Meta to regain a competitive edge against AI leaders like OpenAI and Anthropic. By sharing its advancements, Meta seeks to democratize AI development and build a stronger community around its technologies, which could lead to faster adoption and broader application of its AI research. Investors may view this as a positive step towards solidifying Meta's position in the rapidly evolving AI landscape.
via Markets Gazette