META Future Probabilities (FA)

[TazTheLaz]

Hello EliteTrader,

I have done a DCF analysis for Facebook, and I have 3 different scenarios that I came up with; however, I would like some feedback as to how probable each one is.

3 scenarios:

1. Profit continues to grow roughly 10% per year, and Facebook remains as a “going concern”. Intrinsic Value: $382.13
2. Profit Stagnates (1% assumed growth), and dividends are paid out instead of retaining earnings. Intrinsic Value: $205.11
3. Margins decline, and the company slowly decays (-5% assumed growth). Intrinsic Value: $135.57

Here are the probabilities I assigned to each scenario:

1. 45%
2. 50%
3. 5%

The intrinsic value based on these probabilities would be roughly $271.20, however, I think this may be a bit too high. Are my probabilities too optimistic or pessimistic?

 

[optaiwan]

meta's cash flow from its operations are still very outstanding compared with other companies. i own a very small chuck of the stock and plan to add more. but i want to hear more about your take on this stock. Will metaverse become another mold to this company?

 

[TazTheLaz]

meta's cash flow from its operations are still very outstanding compared with other companies. i own a very small chuck of the stock and plan to add more. but i want to hear more about your take on this stock. Will metaverse become another mold to this company?

Honestly, the Metaverse is going nowhere. It is just a silly little video game, and I have huge doubts that anything will come of it, outside of being a cut and paste of VRChat.

Besides the Metaverse, FB, Instagram, and WhatsApp are all very good businesses, which are sure to generate cash flow.