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Facebook: Opportunity For Converting Millions Of Businesses Into Paying Advertisers

May 02, 2021 3:04 PM ETMeta Platforms, Inc. (META)5 Comments
David Zanoni profile picture
David Zanoni


  • Facebook has 200 million businesses using the site, but 10 million are active advertisers.
  • Facebook has a large opportunity to convert many of the non-paying businesses into paid advertisers.
  • The stock is valued attractively on a PEG ratio basis.
  • Looking for a helping hand in the market? Members of Margin of Safety Investing get exclusive ideas and guidance to navigate any climate. Learn More »

Smartphone pop up for advertising.Asian woman travel backpacker shouting open mouth through from screen mobile.Girl looking to aside copy space for present promotions.Digital marketing online cencept.
Photo by Chaay_Tee/iStock via Getty Images

Facebook (FB) maintains the lead as the top social media site as measured by daily active users [DAUs] and monthly active users [MAUs]. Facebook now has 1.88 billion DAUs and

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This article was written by

David Zanoni profile picture
Through diligent analysis, he is ranked in the top 1% of blogging analysts on Tipranks.com for performance and accuracy. David previously contributed to Kirk Spano's Margin of Safety Investing [MoSI] Marketplace Service and Risk Research Inc.David focuses on growth & momentum stocks that are reasonably priced and likely to outperform the market over the long-term. He is a long term investor of quality stocks and uses options for strategy. David told investors to buy in March 2009 at the bottom of the financial crisis. The S&P 500 increased 367% and the Nasdaq increased 685% from 2009 through 2019. He wants to help make people money by investing in high-quality growth stocks.

Analyst’s Disclosure: I am/we are long FB.

Business relationship disclosure: The article was written by David Zanoni for Kirk Spano's Margin of Safety Investing service [MoSI].

The article is for informational purposes only (not a solicitation or recommendation to buy or sell stocks). David is not a registered investment adviser. Kirk Spano is an RIA. Investors should do their own research or consult a financial adviser to determine what investments are appropriate for their individual situation. This article expresses my opinions and I cannot guarantee that the information/results will be accurate. Investing in stocks involves risk and could result in losses.

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Comments (5)

Bold Investments profile picture
I just plugged the numbers into my spreadsheet & though they are simple metrics the co looks great. Revenue growth average for the last 5 quarters is 26.1%, Operating Income average is 51.2% & Net income last 5 quarter average is 75%. I plug many co's into my spreadsheet & very rarely is the Op & Net growing at faster rates than Rev. The other 2 that come to mind are NFLX & IDXX, both of which speak for themselves. FB's Cash / total Liability is also growing: 1.8 5 quarters ago to 2.2 now.
Guraaf profile picture
My 50% of portfolio is now in $FB. There is a lot of monetization that can happen with Messenger and WhatsApp.
Selling directly on FB and IG is the real opportunity....FB still undervalued. Should be $400 right now.
@David Zanoni So what is your fair value estimate?
David Zanoni profile picture
@user1102170119199187 I view FB as fairly valued right now based on the the reasonable PEG ratio, which takes multiple years of expected future growth into account. We offer bottom fishing prices for subscribers at Margin of Safety Investing, so I won't reveal that figure here.
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