NASDAQ:META, a growth stock which is not overvalued.

Take a closer look at META PLATFORMS INC-CLASS A (NASDAQ:META), an affordable growth stock uncovered by our stock screener. NASDAQ:META boasts strong growth prospects and excels in financial health indicators, all while maintaining a reasonable valuation. Let's break it down further.

Unpacking NASDAQ:META's Growth Rating

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:META scores a 7 out of 10:

• META shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 116.00%, which is quite impressive.
• Measured over the past years, META shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.50% on average per year.
• The Revenue has grown by 21.62% in the past year. This is a very strong growth!
• Measured over the past years, META shows a quite strong growth in Revenue. The Revenue has been growing by 19.29% on average per year.
• Based on estimates for the next years, META will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.58% on average per year.
• The Revenue is expected to grow by 12.27% on average over the next years. This is quite good.

Valuation Assessment of NASDAQ:META

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:META, the assigned 6 reflects its valuation:

• Compared to the rest of the industry, the Price/Earnings ratio of META indicates a somewhat cheap valuation: META is cheaper than 65.22% of the companies listed in the same industry.
• Based on the Price/Forward Earnings ratio, META is valued a bit cheaper than 65.22% of the companies in the same industry.
• META's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. META is cheaper than 71.01% of the companies in the same industry.
• 71.01% of the companies in the same industry are more expensive than META, based on the Price/Free Cash Flow ratio.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• META has an outstanding profitability rating, which may justify a higher PE ratio.
• A more expensive valuation may be justified as META's earnings are expected to grow with 22.09% in the coming years.

Assessing Health Metrics for NASDAQ:META

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:META, the assigned 8 reflects its health status:

• META has an Altman-Z score of 12.09. This indicates that META is financially healthy and has little risk of bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 12.09, META belongs to the top of the industry, outperforming 91.30% of the companies in the same industry.
• META has a debt to FCF ratio of 0.37. This is a very positive value and a sign of high solvency as it would only need 0.37 years to pay back of all of its debts.
• META's Debt to FCF ratio of 0.37 is fine compared to the rest of the industry. META outperforms 79.71% of its industry peers.
• A Debt/Equity ratio of 0.12 indicates that META is not too dependend on debt financing.
• Although META does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• META has a Current Ratio of 2.68. This indicates that META is financially healthy and has no problem in meeting its short term obligations.
• A Quick Ratio of 2.68 indicates that META has no problem at all paying its short term obligations.

How do we evaluate the Profitability for NASDAQ:META?

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:META, the assigned 8 is a significant indicator of profitability:

• The Return On Assets of META (20.53%) is better than 97.10% of its industry peers.
• The Return On Equity of META (30.60%) is better than 95.65% of its industry peers.
• META's Return On Invested Capital of 24.19% is amongst the best of the industry. META outperforms 95.65% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for META is significantly above the industry average of 10.03%.
• The last Return On Invested Capital (24.19%) for META is above the 3 year average (22.24%), which is a sign of increasing profitability.
• With an excellent Profit Margin value of 32.06%, META belongs to the best of the industry, outperforming 95.65% of the companies in the same industry.
• Looking at the Operating Margin, with a value of 38.70%, META belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
• Looking at the Gross Margin, with a value of 81.50%, META is in the better half of the industry, outperforming 75.36% of the companies in the same industry.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of META

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.