Meta Platforms (NASDAQ: META) is without doubt a leader in the technology and internet industries. It has been a monster success story and a business that has done a great job rewarding its longtime shareholders, something that holds true in more recent times.
As of this writing, this social media stock has soared almost 400% in the past two years. This means that a $10,000 investment made 24 months ago would be worth nearly $50,000 today. That gain is hard to beat.
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But should you buy Meta shares right now?
Meta stock took a hit in 2022 as did the rest of the market. That year, the company posted a surprise 1% year-over-year revenue drop, which occurred after years of tremendous double-digit sales gains. As the Federal Reserve started to aggressively hike interest rates to combat soaring inflation, advertisers pulled back their spending, negatively impacting Meta.
That same year, the company’s operating margin came in at 25%. This was down from 40% in 2021. Meta’s costs had soared 23% as it focused on restructuring efforts. Shareholders clearly weren’t pleased at the time, as shares fell 64% in 2022.
But nowadays, the business is on a much better footing. Revenue jumped 16% before rising 22% through the first nine months of this year. Additionally, profitability has improved, with Meta reporting a stellar 43% operating margin in the third quarter of 2024.
The management team feels so optimistic about the position the business is in that they finally authorized dividend payments in May of this year. Meta had its first-ever quarterly payout of $0.50 per share in June. Given that the company generated $15.5 billion in free cash flow in the latest three-month period, there is plenty of capital for dividends as well as sizable share buybacks.
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