In today’s article, I will analyze and compare Meta (FB) and Twitter (TWTR) to determine which social media stock is currently a good investment.
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Social media companies such as Meta (FB) And Twitter (TWTR) Is popular among investors and for good reason. These entities have become a family name because they generate consistent profits, grow top-line at a tremendous pace, and enjoy high-profit margins.
Social media platforms generate most of the sales through advertising revenue and this trend may continue in the future. Indeed, the transition to digital continues to gain momentum worldwide, allowing Meta and Twitter to benefit from a secular tailwind.
With that in mind, let’s see which of these two stocks, FB and TWTR, is currently a good investment in the second quarter of 2022.
Meta
One of the world The largest company According to market cap, the meter is worth $ 606 billion. Formerly known as Facebook, Meta Stock is now down 40% from its all-time high because Wall Street was concerned about Apple’s privacy changes that would affect future ad sales. In addition, the Q1 of 2022 dragged Meta down.
Meta is the world’s largest social media platform with 3.6 billion monthly active users, an increase of 9% year on year. Of Sales were up Net revenue rose 37% to $ 118 billion and 20 39.4 billion by 2021. Its free cash flow also increased by 67% last year to $ 38.4 billion.
According to analysts, the growth of meta revenue will slow down Expect sales growth 12% increase to $ 132.2 billion in 2022 and 17% to 5 155 billion in 2023. By comparison, its consistent revenue is projected to expand at an annual rate of 18.5% over the next five years.
In 2021, Meta Reality Labs made লাভ 10.2 billion, which is its Metaverse business. While this number has scared off investors, there is enough liquidity to spend money on the next big thing for social media to meet.
Twitter shares rose 25% in the single trading session on Monday after it was published Owner of Elon Musk The company has a 9.3% stake. Despite the recent uptick, Twitter shares are still 38% lower than the all-time high.
In the fourth quarter of 2021, Twitter grew revenue by 22% year on year. This growth was due to improved product quality, strong demand from advertisers, and strong implementation by its sales team.
Twitter stocks have performed less in the larger market since they went public in 2013. It initially aimed to touch 400 million MAU or monthly active users by the end of 2013 but missed the target by a huge margin. The company then replaced its MAU metrics with monetized daily active users to eliminate inactive and spam accounts.
In 2021, Twitter’s mDAU grew 13% to 217 million. It expects mDAUs to touch 315 million by 2023 with an annual growth rate of 20% for each of the next two years.
Analysts expect Twitter Increased sales 18% increase to 8 5.87 billion in 2022 and% 7.32 billion in 2023 by 22%. By comparison, revenue is projected to grow at an annual rate of 80% over the next five years.
Judgment
We can see that the FB stock is priced at 2022 sales at a multiple of 4.6x and 18x earnings ratio which is quite reasonable. By comparison, Twitter is trading 6.4x forward sales and 60x price-to-earnings multiple.
Further, FB stocks are trading at around 50% discount whereas Twitter is trading at 10% premium compared to the consensus price target estimate. I believe its lower valuation and greater upside potential make FB stock a better buy today.
FB is trading at $ 223.14 per share, $ 0.19 (+ 0.09%) on Friday morning. Year-to-date, the FB is down -33.66%, compared to the -5.50% increase in the benchmark S&P 500 index over the same period.
Author Profile: Aditya Raghunath
Aditya Raghunath is a financial journalist who writes about business, public equity and private finance. His work has been published on a number of digital platforms in the United States and Canada, including The Motley Flower, Finscreener and Market Realist.
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