QS Research · Michael Burry's Scion Capital analyst template · 2006
Meta Platforms, Inc. (META)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case 0% · downside -30% · upside +31%
The market is treating META's AI capex and legal charges as if they permanently impair the ad franchise, but Q3 2026 revenue rose 26% to $64.60B and ex-charge EPS was $7.40, so the operating engine is still strong. Section 13's TTM net income base of $75.25B is noisy because it includes the $9.89B Q3 legal charge and 2026 tax one-offs, but I keep it as the single base to avoid mixing earnings definitions. At the current 21.3x P/E the value is essentially today's $1,602.34B market cap (0%); the GOOGL 14.8x P/E case is $1,113.7B (-30.5%) and the MSFT 27.9x P/E case is $2,099.5B (+31.0%). That leaves no margin of safety for a long and no sufficient downside for a short, so META is a watch until FCF inflects or the price falls toward the low-peer case.
Key numbers
- Share price: $622.75
- Market cap: $1,602.34B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $241.60B
- EV / EBITDA (TTM): 15.4x
- P/E (TTM): 21.3x
- Price / book: 5.88x
The 15 boxes
- ✓ 1. Long-form business notes
Meta reports two segments—Family of Apps (FoA) and Reality Labs (RL)—and says substantially all revenue comes from advertising placements on its family of apps; RL sells consumer hardware, software and content and is expected to lose money for the foreseeable future. FY2020-FY2025 XBRL shows revenue rising from $85.97B to $200.97B, operating income from $32.67B to $83.28B, operating cash flow from $38.75B to $115.80B, and capex from $15.16B to $69.69B. The business shifted from a FY2020 product set centered on Facebook, Instagram, Messenger, WhatsApp and Facebook Reality Labs to a latest 10-K emphasizing AI/superintelligence, Reels and discovery, Meta AI, Threads, AI glasses and wearables; FY2025 costs were 82% FoA and 18% RL.
- ✓ 2. Competitive advantage
The sources show a scale-based franchise: FY2025 revenue $200.97B, operating income $83.28B, operating cash flow $115.80B, and positive operating income in every year FY2020-FY2025, though FY2022 operating income fell to $28.94B from $46.75B. The advantage is not switching-cost based: substantially all revenue is advertising, marketers have no long-term commitments, and TikTok is named as reducing some user engagement; ad targeting also depends on third-party signals that Apple and Google can restrict. Acquisition-based scale from Instagram and WhatsApp remains under antitrust appeal, and EU/Spanish actions have imposed fines and damages of about EUR 798 million, EUR 200 million, and EUR 542 million that are legal one-offs, not operating earnings.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) revenue rose 26% YoY to $64.60 billion, with ad impressions +10% and average price per ad +14%, but GAAP income from operations fell 37% to $12.99 billion (20% margin vs 40%) because costs included a one-off $9.89 billion August 2026 multistate attorneys general charge that pushed G&A up 323%. Capex including finance lease principal was $34.91 billion in the quarter, cash and marketable securities were $82.45 billion at 9/30/2026, and headcount was down 15% YoY. Outlook items given: Q4 2026 effective tax rate 15-17%, full-year 2026 Reality Labs operating losses of roughly $18-19 billion, and continued ad-targeting pressure from regulation and platform changes. Neither source discloses share repurchase amounts.
- ✓ 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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