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A sizzling summer for Meta stock (META) with potential for continued growth

Meta stock (META) has had a remarkable summer, and Wall Street is optimistic about its future. Despite a 165% increase in its stock price so far this year, industry experts believe that the stock is still undervalued. Mark Mahaney, a seasoned tech analyst at Evercore ISI, stated that the current valuation of Meta is relatively cheap compared to its potential for earnings per share (EPS) growth.

With Meta’s stock trading at a price-to-earnings (P/E) multiple of 19.2 based on estimated earnings for 2024, it appears attractive in comparison to the broader market, which has a P/E multiple of 21. Furthermore, Meta is projected to achieve significantly higher profit growth than the overall market in 2023 and 2024.

According to Yardeni Research, analysts expect Meta’s profits to increase by 30% in 2023 and a further 31% in 2024. In contrast, earnings for the S&P 500 are predicted to decline slightly in 2023 and only rise by 12.5% in 2024. These figures emphasize the strong growth potential of Meta in the coming years.

Meta’s status as a “cheap” stock is reinforced when compared to historical valuation levels. While its current forward P/E multiple aligns closely with its median three-year average of 19.8, its future earnings growth is expected to surpass the average 29% growth rate over the past three years.

Additionally, Meta’s recent product launches have been well-received. The introduction of Threads in July has garnered significant attention, with millions of users engaging with the new platform. This success is notable, considering the presence of established competitors like Elon Musk’s Twitter. These positive developments contribute to the bullish case for Meta.

Furthermore, Meta’s collaboration with Microsoft to introduce Llama, their next-generation open-source large language model, positions the company at the forefront of the AI discussion. This involvement opens doors for greater profit opportunities, highlighting Meta’s commitment to innovation.

Notably, Meta has also implemented cost-cutting measures, streamlining its operations and allowing teams to work more efficiently. The company’s chief financial officer, Susan Li, highlighted these efforts, stating that Meta is now in a favorable position from a cost structure perspective, making it a faster and more agile company.

With Meta poised for continued growth and its stock still considered undervalued, investors have the opportunity to capitalize on its potential. The AI legalese decoder can assist investors in navigating the complexities of Meta’s financials and make informed decisions based on the company’s promising outlook.

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