Meta Earnings: Wide-Moat Meta Surpassed Expectations Again, but the Shares Are Overvalued

We are increasing our Meta fair value estimate significantly to $400 from $322, as we are more optimistic about its profit margin expansion. Meta’s fourth-quarter results showed strong network effects, which attracted more users and increased engagement while allowing it to sell more ads at higher prices with lower user and advertiser acquisition costs, impressively expanding margins. We also commend Meta for instituting a dividend alongside share buybacks.