The detailed evaluation considers not just surface-level metrics, but a holistic view of the company’s operational capabilities, financial robustness, and capacity to navigate challenging market conditions. This in-depth analysis underpins our confidence in META’s investment potential. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Meta Platforms’ Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, META stock looks slightly expensive compared to the broader market.

• Meta Platforms has a price-to-sales (P/S) ratio of 10.3 vs. a figure of 3.2 for the S&P 500
• Additionally, the company’s price-to-operating income (P/EBIT) ratio is 24.3 compared to 24.3 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 18.5 vs. the benchmark’s 24.3

How Have Meta Platforms’ Revenues Grown Over Recent Years?

Meta Platforms’ Revenues have grown considerably over recent years.

• Meta Platforms has seen its top line grow at an average rate of 12.2% over the last 3 years (vs. increase of 6.3% for S&P 500)
• Its revenues have grown 21.9% from $135 Bil to $165 Bil in the last 12 months (vs. growth of 5.2% for S&P 500)
• Also, its quarterly revenues grew 20.6% to $48 Bil in the most recent quarter from $40 Bil a year ago (vs. 5.0% improvement for S&P 500)

How Profitable Is Meta Platforms?

Meta Platforms’ profit margins are considerably higher than most companies in the Trefis coverage universe.

• Meta Platforms’ Operating Income over the last four quarters was $69 Bil, which represents a considerably high Operating Margin of 42.2% (vs. 13.0% for S&P 500)
• Meta Platforms’ Operating Cash Flow (OCF) over this period was $91 Bil, pointing to a considerably high OCF-to-Sales Ratio of 55.5% (vs. 15.7% for S&P 500)

Does Meta Platforms Look Financially Stable?

Meta Platforms’ balance sheet looks very strong.

• Meta Platforms’ Debt figure was $49 Bil at the end of the most recent quarter, while its market capitalization is $1.5 Tril (as of 3/24/2025). This implies a very strong Debt-to-Equity Ratio of 2.9% (vs. 19.0% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $78 Bil of the $276 Bil in Total Assets for Meta Platforms. This yields a strong Cash-to-Assets Ratio of 28.2% (vs. 14.8% for S&P 500)

How Resilient Is META Stock During A Downturn?

META stock has been more resilient than the benchmark S&P 500 index during one of the two recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• META stock fell 73.7% from a high of $338.54 on 3 January 2022 to $88.91 on 3 November 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 20 November 2023
• Since then, the stock has increased to a high of $736.67 on 17 February 2025 and currently trades at around $600

Covid Pandemic (2020)

• META stock fell 32.9% from a high of $217.49 on 19 February 2020 to $146.01 on 16 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 20 May 2020

Putting All The Pieces Together: What It Means For META Stock

In summary, Meta Platforms’ performance across the parameters detailed above are as follows:

• Growth: Extremely Strong
• Profitability: Extremely Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Strong
• Overall: Very Strong

Overall, despite the stock’s elevated valuation, META remains an attractive investment opportunity, bolstered by its strong underlying performance. The company’s strategic AI investments are beginning to yield tangible results, particularly in driving user engagement across its platforms.

Meta’s core revenue model remains firmly anchored in advertising across its extensive app ecosystem, including Facebook, Instagram, Threads, and WhatsApp. By strategically deploying artificial intelligence, the company is not only refining its ad targeting capabilities but also exploring innovative AI-powered content generation technologies. These initiatives position Meta to potentially unlock new revenue streams and enhance its competitive advantage in the rapidly evolving digital advertising landscape. The convergence of AI technology with Meta’s robust user base and established advertising infrastructure suggests promising growth potential.

Preserve & Grow Wealth with Risk-Focused Quality Portfolios

While it doesn’t look like there is much upside to META stock, the Trefis Reinforced Value (RV) Portfolio, has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

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