FB – Market expectations are for Uniform ROA to fade, and management may have concerns about business disruptions, the Metaverse, and AI investments

May 31, 2022

  • Meta Platforms, Inc. (FB) currently trades below corporate and historical averages relative to Uniform earnings, with a 13.8x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to fade to 12%, accompanied by 12% Uniform asset growth.

  • Similarly, analysts expect Uniform ROA to compress to 23% in 2023, accompanied by 27% Uniform asset growth.

  • If sustained going forward, these levels would imply a stock price closer to $624, representing significant potential equity upside for the firm.

  • However, the firm’s most recent earnings call suggests management may have concerns about business disruptions, the Metaverse, and AI investments.

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