저자: TristanCooper · 외국인
요약 보기
Ackman이 Meta에 AUM의 약 10%(약 20억달러)를 투자했다는 점을 소개. 광고 사업 지배력, AI 추천 수혜, 강한 재무(부채비율 0.4, 자사주 감소) 등을 근거로 제시. 발표자는 Meta 장기 성장성은 긍정적으로 보나, DCF 적정가 약 640달러로 현재가(약 639달러)와 비슷해 1년간 횡보 후 기대수익은 평범하다고 평가. Reality Labs 손실과 AI 투자 확대는 우려 요인.
다듬은 글
Bill Ackman has just invested 10% of his portfolio in one unstoppable AI stock. Okay, the stock is Meta. I'm going to show you the exact reasons that he's given on why he invested all of this money into Meta. I'm going to show you exactly what's happening with Meta's financials. We're going to ask the question if we should perhaps invest in Meta stock, too.
And lastly, give you our estimation of Meta's fair value. So, first of all, what happened? Ackman revealed the position in an investor presentation on their website. The stake in Meta is worth about $2 billion. So, they put about $2 billion, roughly 10% of the hedge fund's $20 billion portfolio into Meta.
The hedge fund manager lays out a compelling case for owning Meta stock. Ackman points out that the social media giant is a dominant leader in the securely fast-growing digital advertising space with an entrenched global user base of more than 3.5 billion active users. He goes on to four central pillars of his investing thesis.
I'll show you these in a bit, but basically, he said he believes that Meta's current share price under appreciates the company's long-term upside potential from AI and represents a deeply discounted valuation for one of the world's greatest businesses. This is interesting because Meta stock, you know, is not exactly a stock that's high-flying, at least as of this year.
Um well, first of all, recently, it's down 13% in price. First of all, and even this year, this year, it's down 10%. It's gone nowhere. It's actually gone down. So, why has Ackman chosen to invest it? Well, I pulled up their annual investor presentation, and he's actually just given us outright the exact reason why he he likes Meta stock.
So, here's the reasons. So, as I said before, he said, "Meta is a dominant leader in the securely fast-growing digital advertising space. It's got the entrenched global user base. It's got $200 billion in in revenue, reflecting a 22% annual growth rate. It's got experienced leadership team led by founder and CEO Mark Zuckerberg.
Personally me, I like Zuckerberg a lot. I think he's a great CEO. They operate in two segments, core family of apps and reality labs. Family of apps is Instagram, Facebook, WhatsApp, which is a advertising based business model. And of course, they just dominate this whole sector. I mean, their closest competition is TikTok, but still social media they dominate.
We can all pretty much agree. A sector they dominate a lot less and it's a lot less profitable as of now is reality labs, wearables and metaverse, augmented reality initiatives. This segment is currently loss-making with operating losses representing 25% of Meta's overall profit. As we'll see a bit later on, it's currently trading at a 22 times PE due to concerns around magnitude of spending plans on AI initiatives.
So, this is the thesis, Meta investment thesis. First of all, high-quality advertising business model with increasing returns to scale. They got granular visibility into consumer behavior and interests enables highly precise ad targeting making Meta an essential platform for businesses seeking to maximize their return on ad spend.
And this is true. Anyone who buys ads on Meta or on Facebook, they know exactly, they can pick exactly the user they want. So, it's much better advertising, you know, on social media than just doing TV advertising or or advertising on bill boo boards cuz you can't really pick your specific user base.
The other reason was Meta's business model was one of the clearest beneficiaries of AI integration, apparently. AI-driven content recommendation systems materially enhance user engagement, especially as content has increasingly broadened from the social graph to a wider range of interest-based content.
I personally I'm not sure how much I agree on this one because I actually like the algorithm before AI where you got more wholesome content and just more thought-out content. And now AI just recommends a lot of more sloppy type content. But yes, it can study you as an individual more and know exactly the type of interest that you are in.
So, it does help in a way. They say they're well positioned for long-term earnings growth after plan spending ramp in 2026. Significant upside potential from AI supports front-loading infrastructure and talent investments, historical cost discipline. They have historical cost discipline? Are you sure about that?
Did you Did you forget the metaverse? Anyway, and recently announced budget cuts in the Reality Labs segment highlight focus on balancing AI investments with operational efficiencies. Yeah, I hope Zuck's learned his lesson from the metaverse not to overspend. It says they have a strong balance sheet and a high margin core business provides significant financial flexibility.
Yeah, and this is the balance sheet that he's referring to. Yeah, they've got way more assets than they have liabilities. They've got about 217 more, so they've got 217 billion in equity. They've just got a cheeky 81 billion dollars in cash sitting there, so it is a good balance sheet. I I can't lie about that.
Anyway, the biggest statement that they made was He said, "We believe Meta's current share price under appreciates the company's long-term upside potential from AI and represents a deeply discounted valuation for one of the world's great businesses." And yeah, at least on a PE ratio, you would kind of think that they would be selling for for less than what they're selling for.
You know, PE ratio of 22, market's average is 30, but Meta has had some really good growth at least in terms of revenue and income. Revenue they've grown at a compound annual rate of 24%. Like this is a great revenue bar chart. Currently making 200 billion in revenue. I mean, just 5 years ago it was 117 billion.
6 years ago it was under 100 billion. So, they're kind of just getting more and more revenue. This is their net income. They make pretty high margin, you know, 60 billion dollars in profit from that in 2025 and 2024. They've grown their net income at a compound annual growth rate of 21%, which is really good.
I guess a bit of a question will be what's happened uh this past year? How come they had a little bit less net income in 25 than 24? But at least before that, it was basically just so much growth. Of course, they had tough periods in the past, but on average they grow at 21% that profit margin, and Ackman doesn't see this slowing down anytime soon.
And I don't really see it slowing down anytime soon. I mean, who's going to replace Facebook? Who's Well, maybe Instagram will replace Facebook, but Meta own Instagram, too. Maybe WhatsApp will be the more of a messaging system. Well, Meta own WhatsApp, too. So, I don't see their their profit going away anytime soon unless there's a unless there's a massive global depression, and then obviously advertising spending will decrease by a whole lot.
So, that is a risk to the company. And if you look at the debt-to-equity, yeah, it's grown, but it's still 0.4. It's still very manageable. Debt is just 40% of equity. So, debt is a lot less than equity, and this is the strong balance sheet that Ackman was referring to. I mean, in the past it was way better.
It was only 10% debt. Yeah, they've decided to borrow a bit more money, maybe spend a bit more on AI and and different type things, but it's still 0.4, very manageable. So, Zuck's done a good job with debt, at least. Another good thing that a lot of investors don't pay attention to is they're decreasing their shares outstanding.
So, they're they're strengthening the dilution of their shareholders or strengthening the the amount the the shareholders own of each stock in the company, which I love. As As you guys know, I always rant on about it. So, they're decreasing their shares by about 1.47% a year, which uh which has added up over time.
They've decreased the share count by minus 12%. So, that's really good. They are doing a lot of things right. I can't lie. If you're to sum up the core thesis behind Meta is Well, at least Ackman's thesis is basically because you're paying index-level multiples, actually less than index level, and you're pay you're getting higher growth.
You know, as I showed you before, Meta growing at about 20% mid-term earnings per share. So, they are a very high growth company. That's the simple thesis behind why he is buying Meta stock. I'll just quickly show you the business model very simply, just so you have a bit of an understanding. Basically, they make all of their money from advertising.
I mean, it's it's pretty much as simple as that. Mainly from Facebook and Instagram. Facebook is the original social media platform for connecting friends and sharing content. Instagram is more, you know, a photo and video video sharing app, very big among celebrities and also maybe the younger people, whereas Facebook's a little bit more of the older people.
They also own WhatsApp, which is a messaging app used globally. They own Messenger, that's also a standalone chat app. And then, of course, they own Reality Labs, which I'm not that big on. Meta's division for virtual and augmented reality includes the Oculus VR headsets. And of course, they they put a heavy focus on the metaverse and still have some sort of focus there, but it didn't really seem to work.
But it's a very easy business model to understand. They have users using their platform, engaging socially with friends and family, and then every now and again you see an ad. Or at least on Facebook, you're seeing more and more ads recently. I will I will say that. And because their ads business is so big and it's growing so much, and because they can target, you know, businesses can target their user base so much easier, this is why you've seen the revenue chart look like this.
And then the net income chart look like this. They're just growing at insane rates because they absolutely dominate in the space, and advertisers pay big money for it. But now let's get on to the big question. What is the intrinsic value? And this is something I always like to do because you can get a bit You need valuation.
If you want to be an investor, you have to know how to value a stock. You need to know, well, what's the intrinsic value? What What happens if it does grow well? What happens if it doesn't? Let's build a thesis and let's do the numbers. There's a a website. It's called Stock Unlock. Sign up in the link in the description if you want to.
You get I think you get 10% off or something like that. The first thing you need to decide is what is the net income you're going to use. I'm just going to use their previous net income that they got, which was 60.5 billion. Looks pretty stable. You know, it's actually down from the prior year and it looks like a good starting figure.
Of course, that as I said before, they've been doing really well with their share count. They're lowering it, so we're going to put that in. Who cares about dividend? We're not going to do dividends. I always like to get a 10% return on my investment, so we'll put I want a 10% return and that's how we're going to discount our stock by 10% every year.
And price to net income ratio, I'm just going to say 20. In 7 years time, it's going to sell for P ratio of 20. It's still going to be a dominant business, but it's going to sell for a less of a P than what it is now. Yeah, I always do a 5% growth decay rate. I just like to do that because obviously income and profit slows down over the time.
You don't grow the profit by what you what you once did in the past. You know, it's like a kid. A kid doesn't grow as much as he did in the past, especially after the age of 20. Kind of similar with a business. Yeah, and the last ingredient we need is the net income growth. Um so how much do we expect net income to grow by over the next 7 years?
Well, what did it grow by over the past 10 years over the past 5 years? Well, okay. So, this is revenue net income. Let's get rid of revenue to start with. Net income over 10 years since 2016 grew by 21%. Okay? And if we add in revenue, revenue grew by revenue grew by 24%. This was 10 years, but what what have they been doing over the past sort of 5 years, more recently?
You'll see that their growth has slowed. And revenue was 18% and net income grew by 15%. So, the the net income growth has slowed and the and the revenue growth has slowed, too. Revenue's grown by about 18%. So, I think around 15% what it's done over the past 5 years, let's say it can do that over the next 7 years.
Let's say it can grow by 15% and we'll do a 7-year forecast net income earnings. Well, what does that give us? According to this equation, Meta is around the fair value, basically. It says 0.5% undervalued, but basically, you know, our fair value price is $640. If we compare that to the current price, the current price is $639.
So, it's basically selling for our fair value. You know, at this price, if we see, you know, 15% growth in net income, we can expect a compound annual growth return of 10%. You can expect $14 in dividends paid, and you can expect the future stock price to be $1,200. So, according to this fair value or intrinsic value calculation, Meta stock is basically selling for around its fair value right now.
So, this might give a bit of an explanation why the stock has kind of gone nowhere over the past year, even though we have seen strong growth rates. At this price, you can expect a decent return, but probably nothing amazing, nothing 20, 30% type return, which I'm sure doesn't shock you for such a high market cap company.
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