DISCLOSURE: THIS POST MAY CONTAIN AFFILIATE LINKS, MEANING I GET A COMMISSION IF YOU DECIDE TO MAKE A PURCHASE THROUGH MY LINKS, AT NO COST TO YOU. PLEASE READ MY DISCLOSURE FOR MORE INFO.

RIIQ Pro Newsletter

More robust content and deep insights & analysis related to Investing reserved for Raising InvestorIQ premium subscribers

Good morning investors!

Every Monday morning we publish “RIIQ Deep-Dive Analysis” — a deep-dive article on a specific company, with analysis covering its competitive position, financial performance, valuation, and future outlook, among other things. Members get to learn about the nuances that may make these companies solid long-term, value-oriented investment opportunities.

Grab your coffee and let’s dive in!

In Today’s Newsletter

• Why Meta remains one of the most exciting investment opportunities out there.

• Digital Advertising as a driver of Meta’s success.

• Key metrics and analysis supporting Meta as a financial powerhouse.

• Meta’s unique competitive position within “The Magnificent Seven.”

• Insight on Meta’s competitive edge within the broader AI space.

• Growth potential and valuation.

Deep-Dive

Intro

Meta Platforms, the company behind Facebook, Instagram, WhatsApp, and Messenger, has come a long way since its early days. With a market cap sitting around $1.3 trillion, Meta is a giant not only in social media but in the broader tech landscape as well.

Beyond its massive user base, the company has been making strategic moves in new areas like artificial intelligence, virtual reality, and augmented reality, all while continuing to deliver impressive financial results.

Let's break down why Meta remains one of the most exciting investment opportunities out there, from its strong financials to its position against competitors, and yes, its forays into AI!

A Dominant Force in the Digital World

At its core, Meta Platforms thrives as a social technology company. More than 3.2 billion people interact with at least one of its apps daily—an absolutely staggering reach. From Facebook and Instagram to WhatsApp and Messenger, Meta connects billions of people around the globe, giving the company an unrivaled amount of data and engagement.

What’s driving Meta’s success right now? Digital advertising. Meta generates nearly all of its revenue from advertisements on its platforms.

In Q2 2024 alone, the company posted $39.1 billion in revenue, with the majority coming from its highly targeted ad system. Thanks to advanced data analytics, Meta is able to serve precise, effective ads to its massive user base, creating value not just for users, but also for businesses looking to reach their target audiences.

Financial Powerhouse

Let’s talk numbers, because this is where Meta really shines as an investment.

Meta's Q2 2024 financial performance was nothing short of impressive. The company posted a jaw-dropping 22% year-over-year revenue growth and a 60% rise in profit, beating analyst expectations. Meta’s overall gross profit margin came in at 81%, which is particularly strong for a company investing heavily in emerging technologies like VR, AR, and AI.

Another key figure? Free cash flow. Meta generated $23.4 billion in free cash flow during the first half of 2024 alone.

For investors, this is huge because it gives Meta the flexibility to reinvest in its business—whether that’s stock buybacks, dividends, or new innovations.

In fact, Meta’s strong cash flow has allowed it to buy back billions of dollars in shares, boosting shareholder value even further. This makes Meta not just a growth stock, but a balanced one, offering both capital appreciation and cash returns.

Earnings per share (EPS) are expected to grow at a solid compound annual growth rate of 23% from 2024 to 2026. In 2024, EPS estimates are set at $21.29, marking a 37% year-over-year growth. And in 2025, EPS is projected to increase another 14%, reaching $24.20.

For a company that’s already operating at the top of its game, these numbers suggest Meta still has a lot of room to grow!

Competitive Landscape – META vs. the Other Magnificent Seven

When you’re a giant like Meta, there’s always competition lurking around the corner. In the tech world, the competition comes in the form of the “Magnificent Seven”—the group of the largest U.S. tech companies that includes Alphabet (Google), Amazon, Apple, Microsoft, Nvidia, Tesla, and of course, Meta. But let’s be real—Meta’s position in this group is unique.

Unlike its competitors, Meta isn’t… Upgrade to RIIQ Pro to read in full.

For more robust and meaningful Investing insight & analysis, consider subscribing to RIIQ Pro, our premium newsletter:

• A company-specific Deep-Dive Analysis (provided weekly)

• A detailed write-up of a RIIQ Key Investing Insight (provided weekly)

• RIIQ Top 10 Watchlist - a list of the top 10 companies being monitored and evaluated heavily due to varying factors, along with details of why they may be in our top 10 (provided monthly)

• BONUS: A FREE download of Legendary Investor Insights. 10 pieces of practical wisdom from legendary investors like Warren Buffett, Peter Lynch, Charlie Munger, and many more.

Subscribe to RIIQ Pro to read the rest.