QS Research · Michael Burry's Scion Capital analyst template · 2006
Meta Platforms, Inc. (META)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +0% · downside -14% · upside +23%
Meta is a high-quality, cash-generative ad platform whose Q3 2026 headline was distorted by a $9.89B one-off legal charge: revenue rose 26% to $64.60B, and ex-charge operating income would have been $22.88B versus $12.99B reported. At today's 15.1x EV/EBITDA on TTM EBITDA of $104.30B, net debt of $1.22B and 2,573M shares, the base value is about $612, roughly today's $610.15; a 14% lower EBITDA scenario at the same multiple yields about $528 (-13.5%), while consensus +22.3% next-year revenue at the same 43% EBITDA margin yields about $748 (+22.6%). The stock is not cheap enough on free cash flow—TTM FCF is $28.65B and FCF yield 1.8%—to make the base case clear a +30% long hurdle, but the one-off legal charge and capex-driven selloff make it worth watching rather than passing. I would wait for evidence that capex is converting into FCF or that the legal overhang is capped before committing.
Key numbers
- Share price: $610.15
- Market cap: $1,569.92B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $241.60B
- EV / EBITDA (TTM): 15.1x
- P/E (TTM): 20.9x
- Price / book: 5.76x
The 15 boxes
- ✓ 1. Long-form business notes
Meta reports two segments, Family of Apps (FoA) and Reality Labs (RL), and substantially all revenue is advertising on its family apps, reflected in FoA. Between FY2020 and FY2025, XBRL data show revenue rising from $85.97B to $200.97B and operating income from $32.67B to $83.28B, while capex rose from $15.16B to $69.69B. The latest 10-K shows a broader product set, including Meta AI, Threads and AI glasses, with 2025 costs split 82% FoA/$96.29B and 18% RL/$21.40B; RL is expected to keep operating at a loss.
- ✓ 2. Competitive advantage
The sources show scale and cash generation: FY2025 revenue was $200.97B, operating income $83.28B and operating cash flow $115.80B. But they do not present an unqualified durable advantage: revenue is substantially all advertising with no long-term marketer commitments, users/engagement are critical and TikTok is named as reducing engagement, and Apple/Google platform changes plus antitrust/DMA actions constrain ad targeting and business practices. The advantage supported by the sources is scale and profitability, not an unchallenged network or switching-cost moat.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) was strong at the top line and heavily charged at the bottom: revenue $64.60B, +26% YoY, on ad impressions +10% and average price per ad +14%, but income from operations fell 37% to $12.99B and operating margin dropped to 20% from 40%, with G&A up 323% to $14.86B, mostly a $9.89B charge from the August 2026 multistate attorneys general agreement. Excluding that charge, the earnings release puts Q3 2026 income from operations at $22.88B and diluted EPS at $7.40 versus $3.83 reported. Capital spending ran ahead of cash generation in the quarter: capex including finance leases $34.91B against operating cash flow $32.79B, free cash flow negative $2.12B, with cash and marketable securities of $82.45B at Sep 30, 2026. Guidance is numeric: Q4 2026 revenue $73-76B, FY2026 expenses $175-179B, capex $135-145B, RL losses $18-19B in 2026 and about $15B in 2027.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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