Facebook $FB is one of the first stocks I ever bought in 2016. In 2018, it became the second largest position in my portfolio after I bought more shares during the Cambridge Analytica scandal. I took profits in 2019. Now that Meta stock is down over 40%, should we buy again?
One of the main issues that the market has with Facebook (only) is that the number of users is slowly going down. But if we look at the amount of money they are making per user, it is still increasing. Revenues are still increasing. Even if Apple $AAPL is making it harder to gather data on their devices, Facebook can still turn this around through AI. Besides, the market for digital ads is expected to keep growing with only 2 main players, Facebook and Google $GOOG .
Facebook now gives us numbers for a second revenue segment, Reality Labs, where they are developing the Metaverse. In this segment, they are still losing money.
Facebook has a great balance sheet and they have started buying back shares. Even with a big margin of safety, I believe that Meta is undervalued, and therefore a buy.
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Full analysis of Facebook:
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