3. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 200
Meta Platforms, Inc. (NASDAQ:FB) is a diversified technology conglomerate which operates popular social media platforms Facebook, Instagram, and WhatsApp.
The company recently announced a high-level staff shakeup, with long-time COO Sheryl Sandberg set to resign this fall. Citi analyst Ronald Josey notes that the company also announced plans to better integrate its Product and Business groups, which the he believes will improve decision making and time-to-market for Meta’s products. Josey kept a ‘Buy’ rating and a $300 price target on Meta Platforms, Inc. (NASDAQ:FB) shares, noting that the firm’s growth should pick up in the second half of 2022, as it manages profitability by slowing down the pace of its longer-term investments.
200 hedge funds were long Meta Platforms, Inc. (NASDAQ:FB) at the end of Q1 2022, with collective stakes worth $19.33 billion. This is down from 224 hedge funds a quarter ago. With a stake consisting of 11.19 million shares worth $2.49 billion, Fisher Asset Management was the top shareholder of Meta Platforms, Inc. (NASDAQ:FB) in the first quarter of 2022.
Meta Platforms, Inc. (NASDAQ:FB) reported earnings per share of $2.72 for the first quarter, beating market estimates by $0.21. However, revenue of $27.91 billion for the quarter fell below analysts’ forecasts by nearly $314 million.
Here is what Vulcan Value Partners had to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q1 2022 investor letter:
“Meta Platforms Inc., the parent company of Facebook, reported excellent operating results in 2021. Its revenue increased 37%, operating earnings increased 40%, and the company generated $40 billion of free cash flow. Despite these excellent results, Meta experienced extreme volatility in its stock price during the first quarter. We believe that two factors are responsible for this volatility. First, the company quantified the headwind to revenue from Apple’s recent privacy changes in the amount of approximately $10 billion for 2022. Meta is rebuilding its advertising technology, and we believe the long-term headwinds from Apple’s privacy changes will be limited because Meta will create a suitable solution. Second, Meta continues to invest heavily into its Reality Labs segment, also known as the metaverse. While we believe the metaverse presents great opportunity for Meta, we are not assigning any value to it in our valuation work. While 2022 may be challenging for Meta, the company’s competitive advantages are still intact, and the company trades at a significant discount to our estimate of its intrinsic value. Despite our concerns about a possible recession, we expect Meta to return to double-digit bottom line growth next year.”
