Meta is one of the top 10 companies in the world by market capitalization. It is held widely by both retail and institutional investors and made a lot of money for them since going public in 2012. Meta was included with other tech heavyweights in the popular FAANG acronym alongside Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG). If you had invested in Meta a decade ago, you’re probably feeling pretty good about your investment today.
How do I buy Meta stock?
Shares of Meta were trading around $210 as of November 2021, up 53.44% in past 5 years. You can buying and selling shares through any major online discount brokerage, such as Charles Schwab, E*Trade, Fidelity, or TD Ameritrade. Different brokers have varying commission fees and charges. The most recommended broker to buy Meta stock is eToro, an investment platform used by more than 20 million users.
Before buying Meta stock, investors should perform due diligence to ensure that the company and stock have the potential to perform well. The investor should analyze ad revenue growth, the trends for profit margins, total revenue, and monthly active users (MAU). Fundamentally, investors should research the company’s financials. These can be found in its latest SEC filings.
After you’ve chosen a broker and decided how you want to invest, you can place your order through that broker. It might be a good idea to start with fractional shares as a first step. You can also make a profit regardless of shares dropping, as you can buy in at the average share price.
Should I buy Meta stock?
Meta Platforms has delivered excellent growth in earnings over the last ten years, with its revenue growing from $3.7 billion in 2011 to $117.9 billion in 2021. This is a compounded annual growth rate (CAGR) of 41%. Similarly, the company’s earnings per share (EPS) jumped from $0.46 in 2011 to $13.77 in 2021, achieving a CAGR of 40%.
Meta Platforms has an excellent business, and with its investment in the metaverse, the potential for revenue growth long into the next decade. Excellent prospects right now, massive potential in the long run, and an inexpensive price point to Meta Platforms stock being a buy for 2022. But is it a good time to buy Meta stock right now?
Is Meta stock a buy now?
Meta has had its ups and downs over the past few years, and so has its stock price. The stock is now down 40% from the February 2 high and roughly 48% from the all-time high made on September 1. The recent price action has forced investors to reconsider their views on the company’s future prospects and decide whether to buy the dip or run the other way.
There is no doubt that Meta Platforms faces several issues — notable among them, competition from other social media websites and apps such as TikTok, and the impact of Apple’s moves to improve privacy protection and reduce the ability of apps to track users. User growth has run out of steam and competitive threats grow. That makes it harder to have faith in the strength of Facebook’s rebound. But Meta is pursuing other revenue opportunities, and arguably the most-discussed right now is the metaverse.
Meta Platforms has already invested billions of dollars into making the metaverse a reality. It will be a while before the metaverse takes shape and it becomes clear whether these investments will prove profitable. But more important, Meta is one of the leaders of this trend, and that gives it a substantial opportunity for long-term growth.
Meta’s P/E ratio was about 15.3 as of February 2022. Many tech companies have higher P/E ratios (above 20) because there’s a strong expectation of growth. Alphabet had a P/E ratio of about 24, Apple’s P/E ratio was about 27 and Amazon’s P/E ratio was about 48 at that time. That said, Meta Platforms remains an excellent long-term bet for investors.
Meta is looked at as a volatile stock, so you should be able to deal with some ups and downs in the share price. If we’re near a low though, the current charts could lead to a great risk/reward setup.