META: The Cheapest "Mag7" Stock Right Now
My investment thesis and why Meta offers the best risk-reward in today's market.
Hello everyone!
First off, thank you for reading this The following thoughts are an amalgamation of my research and personal market knowledge.
I’m Sree, and in this post, I will outline my thesis on why I’m interested in META in the current market. I believe it offers the best risk-reward profile among the “Magnificent 7” and currently trades at the most attractive P/E ratio. I have broken my analysis into several segments: the reasons for the recent drawdown, valuation, the CEO’s vision, and my closing thoughts on the company’s future.
ABOUT THE COMPANY
Meta Platforms, Inc. focuses on the development of social media applications and technology that helps people connect, find communities, and grow businesses. The company operates through two primary segments: Family of Apps (FoA) and Reality Labs (RL).
Meta’s primary revenue stream is advertising, where its chief competitor is Alphabet (GOOGL).
RECENT DRAWDOWN
As they say, the stock market is driven by news headlines in the short term.
After META reported its Q3 2025 results on October 29, 2025, the stock declined sharply after an excellent “double beat” on revenue and EPS. However, the headline said otherwise as they had to take a $15.9 billion one-time tax hit to take advantage of the “Big Beautiful Bill” introduced by the administration. If you strip it away, the EPS is a beat at $7.25, a near 9% beat over the $6.67 estimate. The headline, however, was an 84% miss on EPS.
As soon as the headline hit the market, the algos triggered a sell-off due to this artificially high headline. (Fun fact if you don’t know it already—60–70% of market trading is done by algorithms, which can sometimes rise to 90%.) This sudden sell-off hit multiple limit prices, and slowly, weak retail hands joined the force and brought the stock to its current levels.
Of course, there are concerns like CapEx spending, and the “Street” is worried about the spending and how that will convert to ROI. This concern is not new for META, as the same happened in 2022 and META came back up nicely from it. I believe META is already seeing the ROI on their spending indirectly in their revenue growth. We can see that in the next few quarters. Also, CapEx spending is something that can be controlled if they decide to cut it down; the management can come out and declare it, and the stock will go up just like in 2022.
VALUATION
In this segment, I reiterate the same mentioned earlier: this is the cheapest Mag7 stock trading today in terms of P/E and the second-fastest-growing after Nvidia.
The 5-year revenue growth of META is around 20%; gross margins are around 80% and net margins are at 30%. These numbers are exceptional when compared with many companies in the market and also in the Mag7. For a company of META’s size to grow around 20% is exceptional, apart from Nvidia.
With the 10-year P/E around 30, Meta is currently trading at a TTM of 27 and a 1-year forward P/E of 22. The other strong balance sheet metric I see is cash and debt; Meta has around $70+ billion in cash and equivalents, a major chunk of which is going towards CapEx spending. They also pay a small dividend.
CEO
I personally prefer founder-led companies, as founders often have the vision and fire to run the organization with the utmost passion and dedication, operating with a true ownership mindset. There are two ways to look at this, as many people dislike Mark Zuckerberg from a moral standpoint. However, from a business perspective, I believe he is a great CEO and businessman who does everything lawfully possible to protect and grow his company—setting aside the morality aspect, as we live in a capitalist world.
It is impressive to consider that a 19-year-old who started with Facebook has now built a $1.56 trillion organization from scratch in just 20 years; that is no small feat. I am confident the company is positioned to stay and expand during the AI revolution. The CEO is now 41 years old—in his “prime entrepreneur years”—with the energy and drive to enhance life physically, mentally, and emotionally.
FINAL THOUGHTS
Knowing that nearly half of the world’s population actively engages with the Meta Family of Apps every day makes me a very proud shareholder. With over 3.54 billion daily active users, Meta has evolved into an essential global utility. Owning a piece of a company that operates in 180+ countries gives me diversified geographical ownership. I am personally excited about WhatsApp monetization, new products from Reality Labs, and the long-term potential of the Metaverse.
While I expect hiccups along the way—such as antitrust lawsuits worldwide—interested investors can view these as buying opportunities. We have moved past similar challenges in the past and will likely continue to move forward and upward.
Consider Alphabet (GOOGL), which traded at significantly lower levels in late 2025 due to the narrative that AI would “kill” Google Search. Alphabet proved skeptics wrong with strong earnings over the following quarters; the momentum shifted instantly, and the stock is now up 65%+ from those lows. I believe the same will happen with META once CapEx fears subside. As they demonstrate consistent growth rather than just spending, investors will regain faith in management’s execution. Narrative and momentum change quickly, and I believe this stock should comfortably beat the index this year.
As the great Warren Buffett says:
“Be fearful when others are greedy, and greedy when others are fearful.”
Given the recent fears among investors, I choose to invest in META.
Thank you again for reading!!
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DISCLAIMER: THIS IS NOT FINANCIAL ADVICE AND I AM NOT A FINANCIAL ADVISOR. PLEASE DO YOUR OWN DUE DILIGENCE (DD) BEFORE INVESTING IN ANY STOCK, INCLUDING THIS ONE._