- SoloFIRE
- Posts
- Meta Delivered Explosive Growth in Q1
Meta Delivered Explosive Growth in Q1
Meta beat Q2 earnings and the stock has completely recovered from the tariff crisis, is the stock a buy now, and what is the growth driver behind this social media behemoth?
Table of Contents
Overview
Meta reported a revenue of $42.3 billion and EPS of $6.43 in Q1, representing a 16% and 37% growth respectively. Daily active users grew another 6% to 3.43 billion, this is mind boggling growth on top of a 3 billion user base.
Total expense only grew 9% YoY, much slower than the revenue growth rate, resulting in a 3% margin expansion. Meta stock is currently trading at a 25 PE ratio which is not expensive for a company growing 16% per year.
Growth Drivers
The CEO mentioned 5 major opportunities the company is currently investing in: improved advertising, more engaging experiences, business messaging, Meta AI, and AI devices. I believe the first 2 are the most important as they drive the majority of the revenue. The result seems great for the past quarter, as Meta sees average price per ad grew by 10%, conversion rates grew by 5%, and time spent on Facebook, Instagram and Threads are all growing nicely (7%, 6% and 35%).
Reply