![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2022\/02\/Screen-Shot-2022-02-05-at-1.53.21-PM.png\")
<\/a><\/figure><\/div>\n\n\n\nINTRODUCTION:<\/h3>\n\n\n\n
On Wednesday, February 2nd, 2022, after market close, Facebook, which was recently renamed Meta Platforms (FB), issued its Q4-2021 financial results with the following highlights:<\/p>\n\n\n\n
- Earnings per share: US$ 3.67 vs US$ 3.84 expected.<\/li>
- Revenue: US$ 33.67 billion vs US$ 33.4 billion expected.<\/li>
- Daily Active Users: 1.93 billion vs 1.95 billion expected.<\/li>
- Average Revenue per <\/strong>User:<\/strong> US$ 11.57 vs US$ 11.38.<\/li><\/ul>\n\n\n\n
The company also said that its projected revenue for Q1-2022 will be US$ 27 billion to US$ 29 billion, while analysts were expecting sales of US$ 30.15 billion, which would mean 3% to 11% year-over-year growth.<\/p>\n\n\n\n
Based on these results, shares of the company closed down more than 26% on Thursday, February 3rd, which erased more than US$ 230billion of its market cap. This is the biggest one-day drop ever for the Meta platforms (facebook), as can be seen from the below chart.<\/p>\n\n\n\n
![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2022\/02\/Screen-Shot-2022-02-05-at-2.34.25-PM-1024x313.png\")
<\/a><\/figure><\/div>\n\n\n\nMeta\u2019s stock fall marked the biggest slide in market value for a US public company, according to a Reuters analysis of Refinitiv data.<\/p>\n\n\n\n
PGM CAPITAL COMMENTS & ANALYSIS:<\/h3>\n\n\n\n
A deep dive into the company’s Q4-2021 financial report shows that Meta has generated revenues of US$ 33.7 Billion in Q4-20221, showing growth of 20% year over year, as can be seen from the below table.<\/p>\n\n\n\n
![\"\"\/](\"https:\/\/static.seekingalpha.com\/uploads\/2022\/2\/4\/53926820-16439600147318478_origin.png\")
<\/figure><\/div>\n\n\n\nThe above table shows also that advertising revenues are responsible for 97% of Meta’s total revenues. For the first time, Meta broke out its Reality Labs revenues, which includes its augmented and virtual reality business. <\/p>\n\n\n\n
This business is related to metaverse which is a network of virtual reality worlds. Metaverse-related revenues were US$ 877M in Q4’21 and showed 22% year over year growth.<\/p>\n\n\n\n
Some other Facebook’s key statistics:<\/h5>\n\n\n\n
- MAUs \u2013 Facebook monthly active users:<\/strong> Right now, 2.9 billion monthly users access Facebook\u2019s platform, a 7.18% increase year-over-year<\/li>
- Facebook is the largest social media platform globally<\/strong> at 2.85 billion monthly active users worldwide, followed by YouTube<\/a> (2.3 billion), and WhatsApp<\/a>, Facebook Messenger, WeChat, Instagram<\/a>, all bringing in over a billion users, of which Facebook, Whatsapp, Facebook messenger and Instagram fall under the Meta Platforms umbrella.<\/li>
- Highest traffic time on Facebook<\/strong> is Wednesday at 9 am and 1 pm, posting then will typically get the most engagement<\/li>
- 60.42% of the world\u2019s active internet users<\/strong> access Facebook, and 73.13%<\/strong> access \u2018Family\u2019 owned services (FB, Messenger, Instagram, and WhatsApp) every month.<\/li><\/ul>\n\n\n\n
(See source<\/a>.)<\/p>\n\n\n\n
Facebook’s 3.6 billion users correspond to 61% of all people over the age of 15 worldwide. The 9% growth in the number of users, combined with a higher revenue per user, explains the 20% increase in quarterly revenue compared to last year.<\/p>\n\n\n\n
Metaverse:<\/h5>\n\n\n\n
Meta is currently investing heavily in what the company calls the metaverse<\/a>, hence the company’s name change.<\/p>\n\n\n\n
![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2022\/02\/Metaverse-1024x586.jpeg\")
<\/a><\/figure><\/div>\n\n\n\nThe metaverse is a combination of the physical and the virtual world that is accessible when you are online. In short, a world in virtual reality where social media, games, web stores, etc. all come together.<\/p>\n\n\n\n
Free Cash flow:<\/h5>\n\n\n\n
As can be seen from the below table, the company’s Q4-2021. free cash flow surged to approx. US$ 12.6 B,illion showing 36% growth year over year. <\/p>\n\n\n\n
![\"\"\/](\"https:\/\/static.seekingalpha.com\/uploads\/2022\/2\/53926820_16439580452899_rId7_thumb.jpg\")
<\/figure><\/div>\n\n\n\nDue to sell-off, of the Meta Platform shares on Thursday, February 3rd, the P\/E ratio of the company fell to 17, which is extremely cheap for a tech stock.<\/p>\n\n\n\n
Conclusion:<\/h5>\n\n\n\n
The recent sell-off on the Meta Platforms stock appears to be an overblown response – based on fear and traders behavior – to the company\u2019s outlook for Q1-2022, as reported on its Wednesday February 3, 2022.<\/p>\n\n\n\n
Based on the company’s fundamentals and P\/E ratio, we have initiated a coverage of the shares of Meta Platforms with a BUY rating.<\/p>\n\n\n\n
Disclosure:<\/h5>\n\n\n\n
Before Thursday, February 3rd, we didn’t own any Meta Platforms shares in our personal portfolio, nor in the portfolio of our clients.<\/p>\n\n\n\n
In this rapidly changing world, subsequent turbulence and chances of rise in inflation, PGM Capital is at your service as your Professional, Trustworthy and Dedicated, Financial Advisor and Asset Management Institution.<\/p>\n\n\n\n
![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2019\/09\/When-you-succeed-we-succeed-transparant-1.png\")
<\/figure><\/div>\n\n\n\nLast but not least, before taking any investment decision, always take your investment horizon and risk tolerance into consideration. Keep in mind that share prices do not move in a straight line.<\/p>\n\n\n\n
Past Performance Is Not an Indication for Future Results.<\/p>\n\n\n\n
Yours sincerely,<\/p>\n\n\n\n
![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2015\/06\/eric.jpg\")
<\/figure>\n\n\n\nEric Panneflek<\/p>\n","protected":false},"excerpt":{"rendered":"
Dear PGM Blog reader, On Thursday, February 3rd 2022, shares of Meta Platforms, – the parent company of Facebook -, plummeted 26.4% as can be seen from the below chart. INTRODUCTION: On Wednesday, February 2nd, 2022, after market close, Facebook, which was recently renamed Meta Platforms (FB), issued its Q4-2021 financial results with the following[…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":21855,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-21837","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pgm-capital-blog"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/21837","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=21837"}],"version-history":[{"count":62,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/21837\/revisions"}],"predecessor-version":[{"id":21904,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/21837\/revisions\/21904"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media\/21855"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=21837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=21837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=21837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- Facebook is the largest social media platform globally<\/strong> at 2.85 billion monthly active users worldwide, followed by YouTube<\/a> (2.3 billion), and WhatsApp<\/a>, Facebook Messenger, WeChat, Instagram<\/a>, all bringing in over a billion users, of which Facebook, Whatsapp, Facebook messenger and Instagram fall under the Meta Platforms umbrella.<\/li>
- MAUs \u2013 Facebook monthly active users:<\/strong> Right now, 2.9 billion monthly users access Facebook\u2019s platform, a 7.18% increase year-over-year<\/li>