r/valueinvesting
So what’s the deal with Meta?
Author questions Meta's stock drop despite strong ad revenue, social moat, and AI potential, while noting concerns over massive capex.
- Strong social media moat and massive cash generation.
- Ad revenue expected to surpass Google this year.
- AI integration will drive further revenue growth.
- Enormous capital expenditure targets will negatively impact Free Cash Flow to Firm.
- Stock price continues to sink despite positive fundamentals.
I got interested in investing approximately 30 days ago, & decided to search for value stocks. From what I’ve researched & what little I understand, Meta is undervalued. Many investors, YouTube bros, & people in this subReddit believe it’s undervalued. It’s a company with the social media moat, they’re printing cash & it is believed that their revenue from ads will surpass google this year. That is huge!
Everyone has access to that information, & yet the price continues to sink, & it’s trading at $580.
So what am I missing. I know their capex target is enormous, & it will impact the FCFF. But the underlying business is solid, & it’s one of the few companies which will be to generate more revenue cause of AI integration.