Since November 2019, the S&P 500 has delivered a total return of 90.5%. But one standout stock has doubled the market - over the past five years, Meta has surged 183% to $569.99 per share. Its momentum hasn’t stopped as it’s also gained 18.8% in the last six months thanks to its solid quarterly results, beating the S&P by 5.7%.
Is now still a good time to buy META? Or are investors being too optimistic? Find out in our full research report, it’s free.
Why Are We Positive On META?
Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ:META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.
1. Eye-Popping Growth in Customer Spending
Average revenue per user (ARPU) is a critical metric to track for consumer internet businesses like Meta because it measures how much the company earns from the ads shown to its users. ARPU can also be a proxy for how valuable advertisers find Meta’s audience and its ad-targeting capabilities.
Meta’s ARPU growth has been impressive over the last two years, averaging 8.8%. Its ability to increase monetization while growing its daily active people demonstrates its platform’s value, as its users continue to spend more each year. 
2. Elite Brand Reduces Need for Marketing Campaigns
Consumer internet businesses like Meta grow from a combination of product virality, paid advertisement, and incentives (unlike enterprise software products, which are often sold by dedicated sales teams).
Meta is extremely efficient at acquiring new users, spending only 8.7% of its gross profit on sales and marketing expenses over the last year. This efficiency indicates that it has a highly differentiated product offering and strong brand reputation from scale, giving Meta the freedom to invest its resources into new growth initiatives while maintaining optionality. 
3. Outstanding Long-Term EPS Growth
We track the change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Meta’s EPS grew at a remarkable 16.8% compounded annual growth rate over the last three years, higher than its 11.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
These are just a few reasons why we're bullish on Meta, and with its shares beating the market recently, the stock trades at 13.7x forward EV-to-EBITDA (or $569.99 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than Meta
With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.
Put yourself in the driver’s seat by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,691% between September 2019 and September 2024) as well as under-the-radar businesses like United Rentals (+550% five-year return). Find your next big winner with StockStory today for free.
