Meta (META)
META stock has a lot going for it right now from a fundamental point of view. At a 24 price to earnings Meta’s stock valuation is almost perfectly in line with it’s historical average of 23, and they’ve managed to beat their last 4 earnings calls.
Analysts are rating it a Strong Buy on average with a 30% one-year upside. But the best part, META’s EPS is forecasted to increase over 37% in the next year which gives it a very attractive PEG ratio of just 0.7.
| META | |
| Share Price | $575.05 |
| Earnings Per Share | $23.50 |
| EPS (Analyst Forward 1yr) | $32.17 |
| Price to Earnings | 24.5 |
| EPS Growth (Projected 1 yr) | 36.9% |
| PEG | 0.7 |
With a reasonable valuation and strong earnings forecasts – we have put Meta as medium risk, medium reward stock and rate it as a Strong Buy with a +17% one year forecast.
The one thing META doesn’t do as well as someone like Microsoft is their revenue is the exact opposite of diverse, as 99% of it comes from advertising. This raises the risk profile slightly and puts it behind Microsoft in that regard.
Microsoft (MSFT)
Down around 21% year to date, Microsoft stock is a Strong Buy because of its attractive valuation and impressive earnings estimates that make up it’s 1.3 PEG ratio.
| MSFT | |
| Share Price | $372.29 |
| Earnings Per Share | $15.97 |
| EPS (Analyst Forward 1yr) | $18.74 |
| Price to Earnings | 23.3 |
| EPS Growth (Projected 1 yr) | 17.3% |
| PEG | 1.3 |
MSFT stock has a great valuation at a 23 PE given its 5 year historical average is closer to 33 which is 43% higher – meaning Microsoft stock is trading at a massive discount when compared to it’s last 5 years. They also boast a surprisingly impressive dividend history even if it only amounts to around a 1% yield.
Microsoft has also beat all 4 of their last earnings calls and analysts have rated Microsoft a Strong Buy with an average one year forecast of +32%. We have put them as low risk thanks to their diverse revenue sources (Microsoft has 6 main sources vs Meta’s 1), with a medium reward outlook and have rated it a Strong Buy with a +17% one year forecast.
It’s because of Microsoft’s better product mix and therefore lower risk that Microsoft is slightly better buy right now than Meta, even though we consider both MSFT and META to be an incredibly attractive Strong Buy stocks at the moment with similar one year forecasts.
Topics: META stock vs MSFT stock, Meta stock analysis and price forecast, Microsoft stock price prediction
