Instead of looking at the numbers, let us look at the company as a whole. Facebook is a platform that is used by any and all ages, which is something it has over many other social media platforms. This works in the favor of business because they can advertise in one space and hit many different age brackets and genders. If you move to Snapchat or Instagram, it varies slightly, but still can have the same affect. Be sure to research which one is effective though because they each have their specialty.
The stock chart, using the monthly time frame looks great and we should expect nothing less. People have said Facebook is younger than we think in terms of its life cycle, which means there is still room to grow. Of course take a look at the fundamental data, but this could be a company you buy and hold for years instead of months. In the reports, be sure to see what the company has planned for the future and begin to worry if they become stagnant in this department.
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
The company’s latest 10-K report will have the list of risks the company sees as potential issues along with details, but here are a couple to keep in mind during the mean time. First, they have to cater to what the consumer wants, and so far the company has been successful at doing so. Secondly, they have to find ways to retain the consumer by giving new tools and functions to the platform. Facebook certainly seems young in the life cycle but it certainly has a lot of experience. Be sure to look at all the details carefully because it could change on a dime.
Conclusion
Facebook could be a company you buy and hold, but that does not mean it’s a fit for your portfolio. Be sure to do research and fully understand what the company is about. Once you understand that, then you can move forward in your decision making. If you still have questions, be sure to reach out to an investing professional and they can help to 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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