Buy Call on Meta Platforms Based on DCF Undervaluation

about 1 month ago

Parkev Tatevosian, CFA

"Meta Platforms, I calculated its intrinsic value per share at $853 and the current market price is $623. So according to my proprietary DCF model, Meta Platforms looks significantly undervalued. Its weighted average cost of capital is 10.77% and its ROIC tow ratio is also close to 3:1 but it's less than the ROIC tow ratio for Alphabet because Alphabet has a slightly lower weighted average cost of capital. I still like both of these companies. I think they'll make great long-term investments. But if you're forced to pick one, I think Meta Platforms is the better value right now."

The speaker compares Meta Platforms and Alphabet using a proprietary DCF model and other key metrics. Despite both being strong long-term investments, he highlights that Meta Platforms is significantly undervalued compared to its current market price, making it the preferred buy call at this moment.

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