Introducing $META

META. You know what it is. The facebook, instagram, whatsapp company.

META just reported fourth quarter 2023 revenue grew by a staggering +25% YoY to $40.1 billion.

Guidance for next quarter is at a MIND BLOWING +30% YoY (on the high end) to $37B.
I can’t emphasize how ridiculous this is. Keep in mind this is against tough comps next quarter, AND they are accelerating their topline growth at BILLIONS of dollars.

Expenses fell -8% YoY to $23.7B
They cut and laid off 22% of their total workforce from a year ago!
The company is continuing to boost efficiency and slashing costs, returning cash to shareholders.

FCF was $11.5B this quarter. They did $43B in FCF for the full year on revenue of $134B. FCF margin of 32%!

A dividend, for the first time ever, at 50 cents a share was announced.
This will keep a permabid on the stock as this allows a whole new class of “dividend investors” to rush and buy/accumulate META.

And, a $50B share buyback was announced.

From the conf call, emphasis mine:

And last year, not only did we achieve our efficiency goals, but we returned to strong revenue growth, saw strong engagement across our apps; shipped a number of exciting new products like Threads, Ray-Ban Meta smart glasses and mixed reality in Quest 3; and of course, established a world-class AI effort that’s going to be the foundation for many of our future products. I think that being a leaner company is helping us execute better and faster, and we will continue to carry these values forward as a PERMANENT part of how we operate.

Now I want you to think about this for a hot second.

You have a company here doing $40 billion revenue, yes billion, with a capital B, in a SINGLE quarter. And they grew to that at 25% year over year. And are guiding for ACCELERATION in growth next quarter to 30% at the high end. Not only that, it’s a wildly profitable company with billions of dollars of cash flowing everywhere to its shareholders.

Why shouldn’t META be a contender on a board for “hypergrowth” companies? Look at IOT for example. $237M revenue (yeah…M, as in measly millions, not BILLIONS) in the last quarter at +39% YoY with GAAP losses is a shameful comparison.
Do a look back at META when it first IPO in 2012. It did 40% growth YoY to total year revenue of $5 billion, and GAAP net income $1.3 billion.
Do you think IOT is anywhere as exceptional as META and can grow 40% by the time it (ever) hits $5B in revenue and also print wild profits?

Not only that, I would do a quick comparison of share price movements. IOT is up +14.9% since its last earnings on Nov 30.
META is now up +51.5% since prior earnings on Oct 25.

If META were to do, say, $25 EPS next year in 2025 and we slap a 25x multiple on that, META could hit $625 easily by end of this year. +38% return on afterhours $450 price today doesn’t look so bad for an incredible megacap company that is safer than things like IOT.

You know what, SP500 multiple is currently at, what, 20x for single digit growth? Maybe META should get 30x. That could easily put a $750 share price at the end of this year on these lofty forward expectations, that is a +66% return from after hours price. But assuming the market continues to stay bull. And assuming the government doesn’t do any drastic negative regulations against META (this is, I would say, the major risk/reason why META is not my favored pick over AMZN in the long term, of the Mag7)

Seems more attractive risk reward than the constant landmines generated here, such as (borrowing from @PaulWBryant ) ‘Aehrs, Teladocs, Upstarts, Lightspeeds, Rokus, Uipaths, Magnites, 2Us, Talends, Etsys, Amplitudes, and Nutanixes’. (And I would include TSLA to that list)


META reported its first-quarter results on Wednesday afternoon.

Revenue grew by 27% year-over-year (YoY) to $36.5 billion, with $12.5 billion in free cash flow (FCF).

During the quarter, they repurchased $14.6 billion of shares and paid $1.3 billion in their first dividend.

Expenses grew by 6%.

Daily Active Users (DAUs) continue to grow, up 7% YoY; they currently have 3.24 billion DAUs.

The average price per ad continues to recover.

They guided for $36.5 billion to $39 billion in revenue next quarter, which represents a 15.8%-23.4% YoY increase.

Most of the call focused on AI, new features they’re building, and how these enhancements are already being used within their platforms.

They are adding new headcount and increasing their R&D spending. The stock was down approximately 10.5% yesterday due to concerns over increased spending and softer guidance.

Overall, this is a wonderful business generating a massive amount of cash. With Google’s bump in share price today, I believe this makes META the “cheapest” of the MAG7 companies. The ad market appears healthy, as evidenced by The Trade Desk (TTD) also enjoying a nice 10%+ lift this week.

Rick - Long META 5%, TTD 7%,


I posted this on another board yesterday as it looks like the market does not like their AI spending on top of metaverse spending. But the fact is that baked into the current price of the stock is around 10% growth in FCF going forward, which is a really low bar. They should easily exceed that growth. I bought more and also set up some short term deep-in-the-money bull call spreads.



Consider that META is large enough that it could afford to buy TikTok (recall the “sell to America co or shut down” law that just passed). Different audiences, so they would be smart to keep them as separate platforms. META execs get along well with the party in power in US, so regulation hurdles would probably be low.