FB Stock Analysis – Q1 2022 Earnings Update

Facebook is an interesting company and numerous say falls into worth area due to its low PE ratio and capacity. In my assessment I am a bit more conservative.

0:00 Rate
1:28 Q1 Incomes
3:40 Conference Call
5:33 FB Stock Assessment
6:59 Easy Double
7:58 My Take

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FB Stock Analysis – Q1 2022 Earnings Update

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44 Comments

  1. you inspired me to pursue an MBA!! i just finished the first semester today. i always love your carefully-researched investment theses. thanks again!

  2. Hi Sven, Great video again! Have you ever reviewed Adobe (ADBE)? I’m wondering how you view this firm/stock from a value investor perspective.

  3. I do not invest in the US markets and don’t follow US stocks but your presentation makes it easy to understand those businesses and what affects them. Thank you.

  4. Why do you not add in the present value throughout the 10 years? I know they don’t pay a dividend, but their big buybacks are also shareholder returns right? Or did you take their buybacks into account when determining the EPS growth? Because if the latter is the case the growth rates look pretty low considering they’re currently have a buyback program of 50B

    1. I don’t because they don’t pay out dividends, it is invested for growth or buybacks that should increase EPS per share anyway, thus I can’t count it twice!

  5. Sven, quick question – why don’t you take into account in your DCF calculation earnings of 2022-2031 and only discount the terminal value? Do you expect that all the earnings generated between 2022-2031 will not bring any value to the shareholders and will be “wasted” by the management?

    1. those earnings are used for growth, look at the capex of $30 billion… If not I would count it twice without dividends!

  6. Hi Sven, How do you deal with investing in USD when the euro is so weak right now? Does that put you off any positions or does it really matter?

    1. currencies all go up and down, plus I mostly make USD, thus not that relevant for me.

  7. Sven. Stock to analyze HZO – small cap, room to growth, perfect valuation, strong demand, Nickel Mines ASX – strong demand, good valuation, company will grow in volumes 200% next 2 years, JBS – perfect valuation, extremely sustainable earnings, world leader, does not depend on market, expanding plans, MPW – very stable REIT, good dividends, very sustainable base of revenue (hospitals)

  8. Im very bullish on Meta, I do think they will grow faster in the future, for me this is a very long term investment 30+ years.

  9. As a young adult who uses Instagram and Facebook everyday, I can tell you that Instagram is still the main place. I use Facebook for marketplace and make so much money selling my used items. Teens, young adults and adults are obsessed with their Instagram and the image it portrays of them. I don’t know anyone who isn’t active on Instagram at least on a monthly basis. So if you are not sure about buying Meta stock at these prices, I would say, do it fo da gram!!

  10. WARNING: As the channel grows (thank you all for that), there are more and more scammers impersonating me. The only thing I am selling is my Research Platform and Book ​​https://sven-carlin-research-platform.teachable.com/p/stock-market-research-platform
    All that I do, the real links to my content are in the description of the video, I don’t give out my Whatsapp number and I don’t sell any Cryptocurrency related things! BE CAREFUL OUT THERE!

  11. The first point Sven makes: for the first time there has been no revenue growth.

    But he is comparing Q1 of 2022 to Q1 of 2021. The thing is, because of corona revenue growth was extremely high from Q1 2020 to Q1 2021. Up a stunning almost 50% yoy. Now compare that with Q1 of 2022 where most countries are out of lock down. If we didn’t have corona, we would have seen a steady user growth/revenue growth from 2020 to 2022. But instead the growth accelerated extremely in the end of 2020 and start of 2021 and of course slowed down again in the end of 2021 and start of 2022 when things went back to normal.

    On top of that they had a lot of other headwinds as you mention: Reels not greatly monetized yet, Apple’s tracking, Economy, FX, the war. But these things are mostly temporarily.. Reels will get monetized better and better, they are building one of the fastest AI super computers in the world that can speak over 100 languages to overcome Apple’s tracking problems, Forex and the war speaks for itself.

    I understand your thesis for Meta changed, and i even think you were a bit too optimistic in the video you made 7 months ago about FB being a buy at 385$. But it went from best case 25% (7 months ago) to best case 7% without that much change to me.

    1. thanks for sharing anyway, youtube has some safety post things depending on the words you use 🙁

    2. Agree with you
      Their talent is amazing and i do believe the metaverse will be a thing
      I use my oculus everyday
      They just started opening retail stores to sell
      Also i think like you mentioned they have “levers” to pull to increase profits
      I think Reels is a real threat to tiktok

    3. @Max007 well put sir 💪
      I share your points with respect to Meta. There is too much negatives around future of this behemoth.
      On top, Zuckerberg is a great CEO, a true visionary.

    4. @masterjointu Oh yeah I even forgot to mention that tbh. Zuckerberg is a machine and one of the best ceo’s in the world to me. And he ain’t stopping. He is young and has many years left which I’m sure he wants to use to keep his company at the top.

  12. “I don’t invest in is-the-future, i invest in real thing”. I agree! One of your best videos ever.

  13. I really dont think that Meta changed so much in 6 months to be downgraded that much in your analysis. As somebody noticed, if we take out 2021, Meta has been growing steadly.

    6 months without users growth cannot undermine a 10 years thesis that much, so hopefully Meta will do good and beat your analysis (which I think is very conservative).

  14. ❤ Excellent video. I have been sidelines with FB. Other megatechs are value adding – FB is time consuming. The risk is real that things get ugly with marketing money competition. However the price is quite right at the moment to buy if one wants to have an option.

  15. Bought oculus quest 2 for 300 dollars just to try their product. I see a big and strong potential there. Not only games, 3 giant floating screens around you in augmented reality mode while you still see the room and the people around you is really cool

  16. Metaverse bet is not a slam dunk. If market perceive more risk, more P/E contracting can be expected. I’m looking for an exit.

  17. The problem with Facebook for this year is that they have tough y/y comps because last year everyone was forced to stay at home so, of course, their growth would be less. Next year, I expect growth to return to normal. As I see it, the Metaverse is a bonus. If it pans out great, if it doesn’t then the core business is strong and I expect them given their size to be able to come up with other new things to compete with TikTok and growing competition. This valuation is not too pricey as well. Mark said that metaverse is eating 10 billion in expenses so if you just add that back if it doesn’t pan out, we are 50 billion in cash flows on a 550 billion company. For the amount of growth this company has left, it makes sense valuation-wise. Also, they have 40 billion in cash on the balance sheet and minimal debt which must be taken into account.

  18. Hey Sven,

    Great video! With your intrinsic value calculation are you taking into account cash on their balance sheet. Also as Mohnish pointed out, most of Facebooks acquisitions have been home runs. How do you apply a managements track record when making an investment thesis?

    Would love to hear your opinion! Cheers

  19. Honestly, the more I think about it, I’m not so sure Facebook and Instagram will still be widely used 10 years from now. If the metaverse doesn’t take off, FB could go the way of Nokia.

  20. I believe the revenue growth for advertisements will increase in asia and other parts of the world. Europe and American ad revenue has reached a peak and growth will be slow there.

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