저자: Kevin · 외국인
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메타(페이스북)는 매출 3분기 연속 감소와 비용 급증 속에 메타버스(Reality Labs)에 막대한 적자를 쓰고 있어 투자 매력이 낮다고 평가. 반면 트레이드데스크는 uid2 기반 커넥티드TV 광고 성장 기대로 순수 광고주 중 최선으로 제시. 스냅챗 실적 부진, 구글 유튜브 광고 감소 및 반독점 리스크도 언급.
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should you invest in Facebook that's what we're going to review in this video and I'm going to give you some potential other options as well if you're looking for some Pure Play advertising stocks and one of them is killing it today in the markets let's see if it continues and see what we think about ads just remember that I've got to give you an ad and that is to remind you that this channel is brought to you only by ere are no other sponsors it's just those linked down below we've got a final coupon code expiring tomorrow February 3rd 11 59 PM would love to see there email us if you have questions at kevin.com thanks so much now we're going to talk about meta advertising Snapchat Pinterest trade desk and good advertising as well as Google potentially be a massive sector that is missing from your portfolio let's do som of what's going on in the advertising sector look the first thing that we've got to start with is we we've got to talk about Facebook because obviously their earnings were such that folks got very optimistic with a higher Revenue beat than expected Mark Zuckerberg talks about making the company more efficient there was a lot of talk in the earnings call about being tired of having managers managing managers Facebook laid off about 11 000 people and the idea for Facebook is let's try to make the company a little bit flatter less sort of hierarchical which is very expensive because every payroll is expensive if you are an employee whatever your salary is remember that the company probably has to pay about 50 more just to keep you around so if you make 100K probably cost the company 150 000 HR payroll taxes workers comp supplies mistakes days off paid days off vacation sick time you name it okay there are a lot of costs that come along with that that but that's okay but it makes sense if you can cut out some middle level management and keep the company more efficient there's a great option opportunity to reduce your cash burm especially since meta is well continues to expect to spend a lot of money on uh reality Labs which is really their money losing division for the metaverse and the reason Facebook is really doubling down on the idea of the metaverse is because they believe the metaverse my opinion is the next Frontier for social media advertising and they want to make sure they get the grip on the metaverse so that way when people start actually spending more time in the metaverse maybe the time they spend now on YouTube they spend in the metaverse Facebook could be the one that has a dominant advertising platform so this year at least they're calling 2023 the year of efficiency simplifying their organizational structure and really trying to get back to a return to growth they're increasing their share BuyBacks they're lowering their expenses and really well digital advertising demand and pricing is still weak they're starting to see some green shoots along with an improvement in online e-commerce now that was actually surprising to me so you're seeing e-commerce see a little bit of a pop in advertising and you're saving seeing travel and health spending substantially up the sectors that are down in advertising or financial services and Technology with average price paid per ad down about 22 however they did allude to more growth in the potential advertising sector for short form content such as Facebook and Instagram reels which YouTube just yesterday turned on monetization for short form reels uh but well sure YouTube shorts basically a 60 second or less content they just turned on monetization for that so we'll see uh what that ended up ends up doing to the advertising sector but there's a lot of focus on Facebook Snapchat uh trade desk and Google for advertising Google does end up reporting today uh Pinterest is another one that's moving on this they just announced they're expecting to cut 150 jobs you've had similar cuts at Google Google just had five Executives from the doubleclick ad business which some say holds about 90 market share and sort of the brokering sector for brokering website ads five Executives just apparently lost their jobs there along with potentially hundreds of other individuals working there uh Google has about a 25 market share of All Digital advertising and then in the other 75 you've got companies advertising like obviously Facebook uh then you've got uh YouTube's obviously part of Google but then you've got a trade desk which is your connected TV Advertiser and so on uh now what's fascinating about the advertising sector is you've kind of got these hidden misses you've got Facebook seemingly potentially excited at least their stocks excited seeing some green shoots in advertising again but you're still getting a hit from reality labs and cash expenses to where they're trying to refine their business to make it more effective unfortunately you had Snapchat that reported and they missed bigly and they that was potentially because you've got 90 percent of snaps user base being under 25 years old leading to potentially a less uh dare I say advertising Revenue than some of the other platforms after all snap generates more Impressions per dollar than Google or meta but that's potentially because the the users are just a lower value Target so advertisers also tend to have limited data using Snapchat on how their ad is doing and this is leading a lot of folks to focus on different platforms and kind of brings me to uh wanting to look at two things one I want to look at the fundamentals for Facebook and number two we I want to understand trade desk and their uid2 platform a little bit more first though let's look at meta's fundamentals for a moment so here's meta fundamentally and we'll go ahead and look at some of these numbers together so Facebook's Revenue declined for the third quarter in a row year over year so you're really in a revenue recession at Facebook right their revenue is down to 32.1 billion dollars versus 33.6 at the same time last year that's about a four and a half percent decline in Revenue at the same time as their revenue is declining their costs are going up substantially while their revenue declined four percent their costs of goods sold which actually doesn't include research and development increased 31 so even though the stock is rallying you do have some problems Revenue declining four percent and costs of goods sold up 31 r d also exploded 9.7 billion dollars of r d expense compared to about seven billion dollars of r d expense last year puts you in about a 39 percentage Point increase in research and development their marketing and sales and GNA stayed roughly flat to slightly negative uh and really what you had was a a cost structure that just became a bit more well costly so their net income fell their net income sitting at about 4.6 billion dollars down from 10 billion dollars last year so you've got about half as much income coming into Facebook as you did last year and if we go to a cash flow statement for the company we're not terribly worried about the company's assets and their balance sheet and companies well capitalized but if we look at the cash flow statement we can see do they actually have cash flow and if you take their net income and you look at their operating cash they do they've got operating cash from about 14.5 billion dollars in a net cash provided by operating activities hold on let me just make sure quickly that we've got this aligned properly here we've got net income of 4.6 we've got depreciation share based comp uh accounts receivable accounts payable we've got other liabilities we've got net cash okay yeah exactly okay then here we have purchases of property and Equipment nine billion dollars this gives you a free cash flow estimate free cash flow would be the difference between cash flow from operating and cash flow or cash expense for Investments so if we look at 14.5 minus nine you're sitting at about 5.5 billion dollars of free cash flow it's not bad so they're still making substantial amounts of money and part of this is because they're adding back in about 2.3 billion dollars in depreciation uh they're adding back in three billion dollars of share-based compensation so you really have a company that's not short for cash they've got plenty of cash 5.5 billion dollars of cash in just the three months ending uh 2022 that's not bad it's actually very impressive if you look at the free cash flow for 2022 this is a company that's killing it with cash cash for the entire year of 2022 you're sitting at free cash flow of about 15 billion dollars so plenty of cash the question that you have to ask yourself is if you want to make or if you want to make a meta investment if you're asking yourself should I invest in meta is you've got to ask yourself do you believe in the potential future of reality Labs because that's obviously where a lot of money is going right now uh twice as much of their free cash flow is basically going into research and development and that's expected to continue so you have to believe that ultimately reality labs and virtual reality is as they say the next evolution in Social technology and if you don't believe in that probably don't want to invest in Facebook now keep in mind there are also other players in the space take a look at Apple's upcoming mixed reality of virtual headset this is a Bloomberg piece breaking down exactly everything you want to know about it I'll give you a quick picture of roughly a rendering of what it might look like you could see that on screen here look pretty cool some people say it's a little bit uncomfortable though based on some of the people in the beta for it well probably more like an alpha for it but anyway Apple's long anticipated mixed reality headset isn't a an attempt to recreate a 3D version of the iPhone operating system so think about basically uh apps and icons on uh on sort of a 3D augmented reality space in front of you and somehow being able to control those buttons with gestures so there won't actually be a hand control device there'll actually be cameras that look down at your hands to try to understand what you're gesturing so you can kind of move around or maybe touch a keyboard or something that'll be quite interesting now the expectation is this will cost about a thousand bucks and uh it's a likely to be named reality Pro which I feel like is a little bit of a jab there at meta versus expenses on reality labs uh and uh then in the future they expect to potentially come out with a thousand dollar product uh like a lower cost product so starting with the premium tier and coming down hand and eye tracking capabilities uh ability to connect to external or become an external display for connected Mac uh basically you'd zoom in pinch with your fingers and your thumb they'll also be a little wheel which I think is kind of cool at least it's the rumor that you'll be able to kind of go from virtual reality to augmented reality so that way you can see the world in front of you with sort of a layers of apps and stuff I think it'd be neat if I were ever on a run to be able to wear something like this if they got light enough and the battery packs got light enough to be able to kind of see the world but then have you know news up or something I I don't know it's maybe that's a bad thing but that's kind of what I envisioned for this but I think uh Apple is doing this with a separate battery pack that you would carry separately uh and it's not actually on the head device unlike the Facebook version which is on the head device a lot of people talking about this is potentially being useful for health tracking video games uh I think maybe like one-on-one face times will be useful with couples for this or maybe if you're in the future in a self-driving car or you're on a treadmill uh this could be kind of useful M2 will be made with Taiwan semiconductors enhanced five nanometer technology and it's a neural processing units can any 20 billion transistors this will be a 25 increase from the M1 some testers have complained that it could be a bit cumbersome headset battery pack lasts for about two hours and people will be able to try it out in the uh in the actual Apple Store now the reason I bring that up with meta here is obviously because there's competition in that reality loud space and Apple's the big boy coming in we could actually look at segment information here at Facebook and see that uh reality Labs let's see here reality labs labs absorbs um this is quite interesting how this is aligned there we go these align like this and then we have family of apps here reality Labs reality Labs showing I don't know why this is so uh misaligned here it's so difficult to understand reality labs this is segment info of Revenue there we go okay reality Labs created 727 million dollars of Revenue and uh reality Labs cost about 4.2 billion dollars almost a billion dollars more than uh what the company uh or or what the loss was last year so you get about 4.2 billion dollars going into reality labs and losses and that is just in the last three months of 2022 which means if you look at that on an annualized basis they're spending about 17 billion dollars a year uh in losses on the metaverse so again even though they're buying back shares the numbers aren't as bad as expected in the long term you got to ask yourself how much do you believe in the potential for a company that's shrinking Revenue to be able to turn around and start creating revenues again uh and that's ultimately a question you have to ask yourself as an investor now one of the things you can do to help you along with that is we could look at Wall Street consensus estimates and if we jump over to uh Facebook for uh Wall Street consensus estimates yeah let's see here we can find out that the projected earnings per share for Facebook in 2023 is 11.4 dollars and that could grow by about 20 percent for 2024 and 2025 but things get really blurry after 2024 and 2025 where Wall Street actually thinks that earnings are going to go negative Again by 2026 and 2027.
so in other words unless you start producing revenue from reality Labs by 2026 your earnings are probably going to start declining again which would make your cost per growth very very expensive at Facebook but consider that companies multiples right now right now Facebook stock in the pre-market is trading for about a buck 85.
divide that by about 11.4 and you're trading for about a 16 times multiple if you think that the company's going to grow at 16 in the foreseeable future you're really only paying about one times for the growth PEG ratio right dividing 16 times earnings by 16 growth you're about a 1x however if Facebook doesn't end up pulling it off with reality labs and their growth ends up only sitting around a measly let's say two or three percent on average over the next few years or let's just go with an even five to make math easy well then you're probably paying closer to 3x on a peg-based ratio and that actually makes Facebook look very expensive so an investment into Facebook right now if you're making a longer term investment is solely based on the growth you expect from reality Labs personally you can make a similar sort of analysis I think you can make a similar sort of analysis on Intel Now intel is a company that's going through very much a similar transition as Facebook except rather than betting on the metaverse Intel is betting on three and four nanometer chips which are Advanced chips then to be developed in new Fabs that they're building in Ohio and expecting to come online by 2025 right now they use a lot of uh TM they actually use a lot of Taiwan semiconductors for for their building and so if you're heavy into Taiwan semiconductors and you're looking for potentially potentially a value play on a transformation maybe Intel is that opportunity where you're actually hedging against tsmc because now you have an American manufacturer the largest American manufacturer and you're betting on sort of a turnaround personally I would rather make a bet on the Intel turnaround thanks to the chips Act and the Tailwinds that that has versus a bet on the metaverse because I don't actually think we're close to the metaverse yet I think the metaverse is something that would be ready player 1esque maybe in the 2030s plus but I'm not convinced that Facebook will be the one to actually get us there and so I'd rather wait to see what actually happens before I make the BET and so when it comes to advertising I actually am much more interested in a company like trade desk now don't get me wrong trade desk has not reported earnings yet and this is going to be big foot and mouth if face or if trade desk ends up missing uh but I will tell you this oh my God trade desk is up eight percent in the pre-market right now I have no idea why possibly just off the back of Facebook I just realized that trade desk is up at 56 dollars tradisk is one of my my it's actually my largest advertising holding in my portfolio now I want to explain a little bit about uid2 because there's a lot of confusion about uid2 so uid2 is something you have to know when it comes to advertising because it's basically a new form of a cookie it's an opt-in cookie where basically you opt in to be tracked for your phone number your email to be tracked and initially you might think to yourself why would you want to opt into that well you're right most people won't in fact only about 10 percent of people are expected to opt in to uid2 style tracking or really any kind of tracking however all uid2 really needs is about 10 percent of people to opt in and then they can model the 10 percent of people who opt in model their behavior and their characteristics against the characteristics of other people who behave in a similar way and this is why uid2 potentially raises your uh CPM metrics on Advertising by as much as 116 percent compared to companies using third-party cookies that's really good on top of that some companies estimate that their reach has increased as much as 40 percent and potentially led to a one thousand percent increase in their actual return on spend now this is incredible and some of this information is uh you know brought To Us by Pub lift which in the advertising space could be a little bit uh uh a little bit on on the buy side uh but uid 2 is worth noting it is an open source Tech and it's basically your new version of cookies and trade desk is one of the companies that's in Connected TV advertising where uh through uid2 and with connected TV advertising trade desk expects to be able to blow up their advertising Revenue now no guarantees but it's basically the New Frontier for advertising where people are saying look why do we want to be on Facebook when you have problems with being able to track advertising success when you could move over to the new technology which is uid2 again an open source framework and the goal of it is actually to protect user privacy and now that's interesting because this is kind of the chart of how it works I'm not going to go super detailed into this but basically the user visits a website the publisher explains hey you know do you want to opt in basically and it gives you the option 10 of users let's say opt-in now that creates a token for that user and only the non-public information is transferred to basically the auction websites for advertising and you get this exchange of of information for being able to basically attract people on the internet and again if you can model around the 10 of people who've opted in then you can continue to sell more ads more effectively and I think the best thing to do is just look at the success that some companies are having and some companies are having great success so for example if you look at Cocoa Village they're the ones talking about a massive uh increase in uh return on ad spend and a substantial boost in reach on top of that uh you're seeing uh a trade desk very optimistically argue that this recession is an opportunity for them to actually gain more market share and get people realizing look in a recession companies are going to have to be more careful with how they spend money so why would you spend money on regular TV advertising when you could use connected TV advertising or you could get the advantages of uid too through some of the services that a company like trade desk provides why not go to a company like trade desk and have a substantially more efficient advertising platform than than potentially waste your money on Facebook like I'm not trying to bag on Facebook obviously I'm biased here I invest in trade desk and I don't invest in Facebook because I don't believe in reality labs and I do believe in uid too but it's an interesting thing to think about again this will all be foot and mouth if they miss earnings here uh when when earnings come up but it's fascinating because you are in this sort of Brave New World of advertising where Snapchat's having trouble figuring it out their user base is very young Pinterest somewhat a bit of a Dying platform Google is getting sued by the Department of Justice for potentially being a monopoly on sell side advertising for brokering website ads then you have Facebook which is throwing all their money away on reality labs and so when you start looking at the advertisers who do you really have left that's like a pure play Advertiser well in my opinion one of the few Pure Play advertisers is trade desk on the other hand you have apple but apple is great uh uh on one hand because of Apple ads you know obviously a little bit biased with apple because Apple can kind of make it harder for everybody else to advertise while at the same time pitching their own ad business but Apple's not a pure play ad business right Apple's a products and services business and then there's a little bit of advertising in there so from a pure play advertising point of view I think trade desk is probably the the best option that exists hashtag no guarantees obviously uh and uh then after that you're probably maybe considering companies like Disney or uh Netflix for their exposure to TV advertising but then again I'm not entirely convinced on their ability to convert uh ads to profitability through Disney Plus or Netflix and instead I'd rather be investing again in the pickaxe instead of the company itself in that case and who's the pickaxe for Disney's connected TV trade desk so kind of all points back the trade test now again no guarantees but I'm very very excited uh about trade desk in the advertising space and I think it's a good place uh to to have exposure uh especially since your financials pretty solid again no guarantees few fourth quarter is going to be great but you've got revenue that increased in the third quarter year over year 30 percent uh now what we can do is we can kind of compare that to what it was in the prior nine months to get a little bit of a trend I I don't have that written down here so let's do that really quick let's divide divide by 808 that puts us at about 35 so you've got a slight slow down that's already been realized but uh you've had so in other words you had 35 growth in the first nine months of the year down to about 30 growth still growth uh but what I love about this company is the margins uh that they have and we've gotta unfortunately what then that makes this a potentially a little bit harder one to analyze is the pink that I've highlighted here shows a single one-time large boost in stock based comp for the CEO a little bit of a problem here because it makes it look like trade desk almost lost money they didn't they made about 16 mil but it's a substantial plummet from the 2021 60 million rev or net income rather if in the fourth quarter growth stays stable at above 25 and we get that stock base comp out we should see some pretty good margins at the come company which is exciting to me especially since their platform operations are basically their their uh uh margin right that's for gross margin so if we look at 70 million dollars in expenses out of 394 million Revenue you're only talking about 17 in expenses which means you've got about an 82 percent gross profit margin Opex grew at uh about 44 so we want in terms of sales and marketing so we want to keep an eye on potentially sales and marketing growing faster than rev so this is not a risk-free company but it's definitely a company that I think has upside from here and again no guarantees but it's one I'm excited about so uh these are some of the things that fundamentally I'm uh watching and curious to know your thoughts so uh leave me some comments now uh you know question here what about Google uh you know Google Google I think again great exposure for uh for what you've got uh to YouTube big fan of that however YouTube Red Avenue actually suffered a decline in the last Google earnings report now we're going to get Google earnings today so hopefully it goes back that's what I'm going to be looking for in the Google earnings is I'm going to be looking for a return to YouTube advertising growth take a look at this this on screen right here is Google's uh ad network uh income and you could actually see that in 2021 you got 7.2 million dollars for YouTube ads but only 7 billion dollars uh in 2022 which is a decline of about 1.85 percent Google search still grew but then again Google search is where they're suffering from the uh Department of Justice inquiry into into their models right so and you've got Google Cloud growth slowing so these are some things to pay attention to for Google again not a pure play advertising play uh so again watching I think the next earnings calls especially the Google one today will be very insightful and and those will be things that I'm paying attention to but some of my thoughts there on the advertising amazing sector hopefully that on Advertising was insightful or interesting to you
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