META Stock Study (5-27-26)

Posted by Mark on June 8, 2026 at 06:30 | Last modified: May 27, 2026 07:04

I recently did a stock study on Meta Platforms Inc. (META, $612.34).

M* writes:

     > Meta is the largest social media company in the world, boasting close to
     > 4 billion monthly active users worldwide. The firm’s “Family of Apps,”
     > its core business, consists of Facebook, Instagram, Messenger, and
     > WhatsApp. End users can leverage these applications for a variety of
     > different purposes, from keeping in touch with friends to following
     > celebrities and running digital businesses for free. Meta packages
     > customer data, gleaned from its application ecosystem and sells ads
     > to digital advertisers. While firm has been investing heavily in Reality
     > Labs business, it remains a very small part of Meta’s overall sales.

Over the past decade, this mega-size ( > $50B revenue/year) company grows sales and EPS at annualized rates of 22.8% and 21.5%, respectively. Lines are mostly up, straight, and parallel except for EPS+sales decline in ’22 and additioinal EPS dips in ’19 and ’25. Five- (10-) year EPS R^2 is 0.61 (0.89) and Value Line (VL) gives an Earnings Predictability score of 55. Shares outstanding decrease 12.0% (1.4%/year).

Over the past decade, PTPM leads peer averages but lags the industry while decreasing from 45.3% to 42.8% (’25) with a last-5-year mean of 37.2%. ROE also leads peer averages but lags the industry while increasing from 18.7% to 30.6% (’25) with a last-5-year mean of 28.1% (shareholder equity consistently positive with 15.5% CAGR). Debt-to-Capital is less than peer and industry averages despite increasing from zero to 27.9% (’25) with a last-5-year mean of 19.2%.

Quick Ratio is 2.1 and Interest Coverage 61.1 per M* who assigns “Wide” Economic Moat, “Standard” rating for Capital Allocation, and a B grade for Financial Health (per BetterInvesting® website). VL gives A++ grade for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 25.9% and 19.2% for ’26 and ’27 (based on 57 analysts).
• Zacks gives YOY ACE 26.0% and 19.7% for ’26 and ’27, respectively (16 analysts).
• VL projects 15.9% per year from ’25-’30.
• CFRA projects 25.4% YOY and 21.7% per year for ’26 and ’25-’27, respectively.
• M* gives 2-year ACE of 22.7% per year and projects 5-year CAGR of 20.1% in Equity Report.

My 14.0% annualized forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 23.4% and 20.4% per year for ’25-’27 and ’25-’28, respectively (based on 70 analysts).
• Nasdaq.com gives ACE 17.6% and 22.9% per year for ’26-’28 and ’26-’29 (12 / 7 / 2 analysts for ’26 / ’28 / ’29).
• Seeking Alpha projects 4-year CAGR of 20.5%.
• Finviz gives 5-year annualized ACE of 19.4% (23).
• Argus projects 5-year CAGR of 16.0%.
• LSEG projects LTG at 18.3%.
• YF gives YOY ACE 8.5% and 12.3% for ’26 and ’27, respectively (53).
• Zacks gives YOY ACE 40.5% and 6.1% for ’26 and ’27 (18) along with 5-year CAGR of 19.2%.
• VL projects 13.1% per year from ’25-’30.
• CFRA projects 1.3% YOY contraction and 15.2% growth/year for ’26 and ’25-’27 along with 3-year CAGR of 12.0%.
• M* gives long-term 23.8%/year ACE and projects 5-year CAGR of 16.4% (lesser of adjusted/GAAP) in Equity Report.

My 13.0% forecast is below the long-term-estimate range (mean of eight: 18.4%). Initial value is ’25 EPS of $23.49/share rather than 2026 Q1 EPS of $27.51 (TTM).

My Forecast High P/E is 24.0. Over the past 10 years, high P/E falls from 38.3 to 33.9 (’25) with a last-5-year mean of 30.6 and last-5-year-mean average P/E of 22.4. I am below the 10-year range.

My Forecast Low P/E is 14.0. Over the past 10 years, low P/E falls from 25.6 to 20.4 (’25) with a last-5-year mean of 14.2. I am [aggressively] forecasting just below the latter.

My Low Stock Price Forecast (LSPF) of $328.90 is default based on initial value from above: 24.7% less than previous close and 9.8% less than the 52-week low.

Since dividend inception, Payout Ratio (PR) is 8.4% in ’24 and 8.9% in ’25. My forecast is 6.0%.

These inputs land META in the HOLD zone with a U/D ratio of 1.5. Total Annualized Return (TAR) is 11.4%.

PAR (using Forecast Average—not High—P/E) of 6.4% is less than I seek for a mega-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on 226 studies done in the past 90 days (my study and 84 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 17.5%, 16.6%, 27.3, 14.2, and 6.6% respectively. I am lower across the board. VL projects a future average P/E of 23.0 that is greater than MS (20.8) and greater than mine (19.0).

MS high / low EPS are $56.06 / $23.50 versus my $43.28 / $23.49 (per share). My high EPS is less due to a lower growth rate. VL (M*) high EPS of $55.00 ($63.53) is in the middle (soars above both).

MS LSPF of $404.20 implies a Forecast Low P/E of 17.7: greater than the above-stated 14.2. MS LSPF is 21.1% greater than the default $23.50/share * 14.2 = $333.70 resulting in more aggressive zoning. MS LSPF still exceeds mine by 22.9%.

MOS is robust in the study because my inputs [except Forecast Low P/E] are near or less than historical/analyst/MS averages/ranges. In support of the MOS, MS TAR exceeds mine by 8.9% per year (too much, actually). My LSPF is also substantially lower.

With regard to valuation, PEG is 1.0 and 1.5 per Zacks and my projected P/E, respectively: fairly valued (M* has 1.2). Relative Value [(current P/E) / 5-year-mean average P/E] is fair at 1.0. “Quick and Dirty” DCF method has stock 40% overvalued [due to Capex but still a headscratcher] while M* (CFRA) reports the stock at a 27% (2%) discount.

Per U/D, META is a BUY under $506/share. BetterInvesting® TAR criterion is met [1038.7 / ((14.57 / 100 ) +1 ) ^ 5] ~ $524 given a forecast high price ~$1039.

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