Alex Sirois
5 min read
Quick Read
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Muse, Meta’s AI agent, reached 10 million users in six weeks, with over 25% shopping at average purchases exceeding $200.
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Alphabet’s free cash flow multiple of 53x far exceeds Meta’s 30x, and Snap still runs a negative operating margin with a debt-to-equity ratio of 2.06.
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Meta’s Q3 GAAP EPS of $3.83 missed consensus due solely to a $9.89 billion one-time settlement; stripped of that charge, EPS reached $7.40.
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Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Meta didn’t make the cut. Enter your email to see the names that beat META. The report is free. Enter your email and see if any of your stocks made the cut.
I have bought shares of Meta Platforms (NASDAQ:META) again and again, and the latest drop gave me another reason to do it. The stock closed at $620.19 on October 27, down 17.49% over the past month. So I added more.
Why I Keep Coming Back to Meta
Meta reaches 3.64 billion people every day, and advertisers keep paying more to reach them. In the third quarter, ad revenue came in at $63.06 billion, up 26%. Ad impressions grew 10%, and the average price per ad rose 14%. The pricing number matters most to me. It tells me AI keeps making Meta’s ads work better for the businesses that buy them.
Muse Is Already Making Sales
Muse, the personal agent built on Meta’s first frontier model, picked up more than 10 million users in the U.S. and Canada in about one and a half months. About 25% of them use it on any given day. More than 25% use it to shop, with an average purchase of over $200. The CEO laid out the plan simply: “For most people, the product should be free, and we will build commerce tools so we get paid a fee based on the transactions that we help facilitate.” Management also expects to improve Muse’s compute cost efficiency by more than 10x in the next year.
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Q3’s EPS Miss Came Down to a Legal Bill
GAAP EPS of $3.83 fell short of the $5.70 consensus because of a $9.89 billion settlement charge. Without that charge, EPS would have been $7.40. Revenue of $64.60 billion beat estimates, and guidance for Q4 revenue is $73 billion to $76 billion. I pay about 23 times earnings for a 30.24% return on equity and 71.5x interest coverage.
