Research archive for META

Meta's $22 billion bet on WhatsApp is finally paying dividends. A decade after acquiring the messaging giant, Meta's non-ad revenue surged 48% year-on-year in the latest quarter, largely driven by WhatsApp business messaging, where companies pay to chat with customers.

You have to go back to the 16th of January for the last time Meta shares closed in the red. The stock is currently on its 18th consecutive day of share price gains, and after-hours trading says it will open in the green again this afternoon. This winning streak is unprecedented and hasn't been done before by any stock on the Nasdaq 100.

Last week Meta released results that were positively received. Daily active users on their various social media platforms rose 5% to 3.35 billion. That's a lot of people!

Meta is a hugely profitable company that has built up a $70 billion cash hoard. The advantage of having all that dry powder is that it can invest heavily in infrastructure, like the $40 billion project to improve its AI capabilities. Now, Techcrunch is reporting that Meta is considering a $10 billion investment in an undersea cable that goes around the world.

Two weeks ago, the EU fined Meta EUR 800 million for what they perceived as market dominance abuse by promoting its market place feature to users. In short, the EU took exception to Facebook users having automatic access to Facebook Marketplace. The European Commission thinks that it creates an unfair advantage for Meta.

Vestact-recommended Meta Platforms reported third-quarter numbers on Wednesday night, showing that it is doubling down on its long-term AI and augmented reality ambitions. CEO Mark Zuckerberg outlined plans for sustained investment in infrastructure and emerging products. The company's pivot into AI has been a driving force behind its 67% stock price increase this year, making it one of the S&P 500's top performers.

I was quite surprised to see in the latest EssilorLuxottica results that the Ray-Ban Meta glasses were their best-selling Ray-Bans around the world. In the EMEA region, which includes Europe, the Middle East and Africa, 60% of all sales from Ray-Ban stores were the Ray-Ban Meta glasses.

A client wrote to me at the end of 2022, complaining about the poor performance of Meta Platforms. The company had renamed itself in October 2021 and hit a high a few days later of around $380 before crashing to $93. It lost 76% of its value in a matter of months.

As a parent with young kids, I find the idea of my children going on social media one day quite daunting. I was pleased to see that Instagram announced some security updates to accounts for teenagers (under 18) which gives parents more control over messaging and content.

I enjoy articles that explore history, providing context to reflect upon our modern lives. This Ben Evans essay titled Asking the wrong questions does just that and it is a great read.

As promised, here is the feedback from my visit to the Meta head office, which I will do in two parts. I'll cover the building tour now, and tomorrow I'll talk about insights picked up about the company. My old school friend, who is now a director of data analytics at the company, spent over 2 hours showing us around the head office campus and chatting about the business.

After a rough few weeks for the magnificent 7 stocks, Meta galloped to the rescue with some great-looking numbers on Wednesday night. Revenues came in at $39 billion, crushing expectations by $760 million. Earnings were up 73% from this time last year at $5.16 per share, well ahead of the expected $4.72. If you annualise those earnings, the stock trades on a price-to-earnings ratio of 22 which seems good value for such a solid business.

Last week, the Wall Street Journal reported that Meta was in talks to buy up to 5% of EssilorLuxottica, the company that owns leading sunglass brands like Ray-Ban. A few Vestact clients have been long-term holders of their shares, even before the merger of Essilor (French, lens maker) and Luxottica (Italian, frame designer).

According to Reuters, Facebook is back in favour with young adults. A few years back the social media site had lost its allure with younger people and it was considered uncool to engage on the site.

The market is having a tough time working out the right price level for Meta Platforms shares. The social media giant (Instagram, Facebook, Messenger and WhatsApp) is run by one of the world's best CEOs, 39-year-old Mark Zuckerberg. They have about 3.6 billion users, which is more than 77% of those currently using the internet.