As per the latest quarterly report, Meta Platforms has 2.76 billion shares outstanding and has bought back almost 5% of the float since the peak in 2017. The shares outstanding have peaked around Q4 of 2017 when the company changed course and committed to strong and dedicated share buy-back plans. Almost $19.2 billion of share repurchases were executed by management, with $38.9 billion available and authorized for repurchases as of the 31st of December. While our Reality Labs products and services may require more infrastructure capacity in the future, they do not require substantial capacity today and, as a result, are not a significant driver of 2022 capital expenditures.Ĭapital Expenditures (Meta Platform Q4 Presentation)Īnother more positive spin on things is that the share buy-back program is carrying on as planned. As we discussed previously, this range reflects a significant increase in our AI and Machine Learning investments, which will support a number of areas across our Family of Apps. Our planned capital expenditures are primarily driven by investments in data centers, servers, network infrastructure, and office facilities. We expect 2022 capital expenditures, including principal payments on finance leases, to be in the range of $29 billion to $34 billion, unchanged from our prior estimate. Even though CapEx increases are not something that investors usually like to see, I would argue that the $3.5 billion capital expenditures increase is a sign of further innovation to come and should be welcomed by analysts and investors alike, as most of it is dedicated to creating new revenue sources for the company. First, possibly a sign of a better time to come, the capital expenditures have seen a significant increase to around $19 billion. I would like to emphasize two positive things that I've found in the release. We are dealing with 290 million more monthly active users since the same time last year. In a similar manner, the Family Monthly Active People increased by 10 million users since Q3 of 2021 as well. Still, it would be wise to point out that we are still dealing with more than 220 million users since the same time last year. We have seen the Family Daily Active People increase only by 10 million users since Q3 of 2021. We expect our year-over-year growth in the first quarter to be impacted by headwinds to both impression and price growth.Īnother worrying sign was the growth slowdown in what management defines as "DAP" and "MAP", which are metrics used to track the number of daily and monthly users on their combined platforms. We expect first quarter 2022 total revenue to be in the range of $27 billion to $29 billion, which represents 3% to 11% year-over-year growth. Perhaps the most troublesome of all is the forward revenue growth guidance, which was lowered to expect a 3-11% growth according to management. Now in Q4, the company missed the expectations by $0.17 per share. In the same quarter, the company was barely able to top the earnings, beating the estimates by only $0.03 per share. The $33.67 billion reported in revenues for Q4 barely managed to beat analyst expectations. The company has missed its Q3 of 2021 revenue estimates, generating some $440 million in revenues lower than what analysts expected. The major issue with the earnings release and the big takeaway is the now already consistent and noticeable top and bottom lines growth slowdown. On the other hand, for investors who believe in the long-term potential of Meta and its social media platforms, it is unlikely that a better value opportunity is going to present itself anytime soon. On one hand, the pendulum is likely to swing the other way in the following days, allowing for an interesting short-term trade opportunity that many would look to exploit. The wipeout that has taken place saw more value being wiped out from the markets than the current market capitalization of 460 of the S&P 500's members.įor prudent investors with a razor-sharp focus on value and for those who have no issues holding the bag for a while, this unlikely chain of events has presented a two-sided investment opportunity. Investors now have a chance to grab shares of the social media giant for prices that we have not seen since the summer of 2020. While the earnings have highlighted several significant issues with their business model, I would argue that the market has overreacted and that a sell-off of this magnitude was largely unwarranted. The crash followed what many would refer to as troublesome Q4 earnings results which have seen the $900 billion tech empire lose more than $200 billion in value in just a matter of hours. The Good Brigade/DigitalVision via Getty ImagesĪt the time of writing of this article, Meta Platforms ( FB) has been down more than 23% in after-hours trading since the markets have closed on the 2nd of February.
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