Taking a look at the 8-K report, let us take a look at the most recent numbers. Instead of the fundamentals, let us look at the user base and see how it’s progressed. Daily active users were 1.23 billion on average for December 2016, an increase 18% year-over-year. Mobile daily active users were 1.15 billion on average for December 2016, an increased of 23% year-over-year. Lastly, monthly active users were 1.86 billion as of December 31, 2016, which is an increase of 17% year-over-year. These are numbers worth paying attention to because it will determine the continued success of the company.
Now, taking a look at the chart using the monthly time frame, we can see that price has done nothing but grow, which is indicative of their current path. Facebook is the leader in the social media space and will continue to do so until someone can come up with a better product. The chart has been increasing for awhile but I believe it is following the overall health of the company. Looking at the chart, everything seems well and there are no reasons to run.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Meta Platforms income statement, its balance sheet, and the statement of cash flows. Potential Meta Platforms investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Meta Platforms investors may use each financial statement separately, they are all related. The changes in Meta Platforms's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Meta Platforms's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Meta Platforms
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Meta Platforms performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Meta Platforms shares is the value that is considered the true value of the share. If
the intrinsic value of Meta is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Meta Platforms. Please read more on our
fundamental analysis page.
How important is Meta Platforms's Liquidity
Meta Platforms
financial leverage refers to using borrowed capital as a funding source to finance Meta Platforms ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Meta Platforms financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Meta Platforms' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Meta Platforms' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Meta Platforms's total debt and its cash.
Breaking down Meta Platforms Further
Risks
For a full list of risks, take a look at the most recent 10-K report, as this will give you details on the risks the company finds relevant. For now, here are a couple to keep in mind while completing your research. First, the company has to maintain their user base because if they begin to shift or go elsewhere, the will no longer have a company. Secondly, innovation is key as these companies change at a rapid pace and will continue to do so as long as the technology allows. The risks are there and they will change quickly so be on your toes by reading the latest reports.
Conclusion
Facebook is the leader in the social media space and will be until someone can come up with a widely accepted product. Until then, be sure to complete your research and determine if this is a good investment for your portfolio. If you still have questions, be sure to reach out to an investing professional as they can help point you in the right direction.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Meta Platforms. Please refer to our
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