Meta's Growth Potential Supported by Strong Profits and Bets on Metaverse and AI
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Meta Platforms (META) has delivered great returns recently and has potential for more growth to reach a $2T valuation based on projected 11% EPS growth rate and reasonable 26.4x P/E ratio.
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META has superb profitability that is on par with FAANMG peers and far exceeds tech sector median, supporting growth potential.
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META is increasing investments in metaverse, WhatsApp monetization, and AI that can drive a projected 10% organic growth rate.
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Upside risks include potential for acquisitions given large cash balance and possibility of TikTok ban benefiting Meta's apps.
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Downside risks include saturation of Facebook in developed markets and uncertainty about future of META's big VR bets, but stock presents compelling growth at reasonable valuation.