Current Valuation of META and Updated Price Targets through Dec 31, 2027

My goal is to buy solid, well-managed companies with a competitive MOAT at a fair or undervaluation level that have strong forecast growth.  Ideally, these investments will beat the S&P500 going forward. 

META is one of my favorite technology investments as it successfully incorporates AI into its advertising with returns feeding its earnings.  Let's take a look at how META has fared versus the S&P500 since 12/31/2012 below: 

META's returns were slightly more than twice the returns of the S&P 500 with 30.47% compound growth versus 14.36% for the S&P 500. That is called slaying the S&P 500 and these are the kind of companies that I want to own long-term (3-5+ years).  

Valuation as of June 29. 2025:

Since December 2021, there have been many opportunities to purchase shares of META when it has been undervalued (black price line below the orange Fair Value Ratio line).  However, most recently, META's price is trading at the orange Fair Value Ratio line, indicating the stock is fairly valued.  However, from the past several years, the chart shows that investors could have bought shares when the stock was undervalued which increases the probability for positive returns going forward, assuming moderate-strong earnings growth is forecast. 

 Price Forecasting:

Predicting the future price returns of a stock is one of the most difficult things an investor can attempt to do.  However, the Fast Graphs system gives a historical perspective combined with analyst forecasts to increase the chances for a successful forecast in the next 1-2 year period.  

Referencing the above chart, if META trades at it's 11FY Normal P/E of 29.49x, the stock price may trade as high as $937/share by 12/30/27.  If the stock trades at a P/E of 20.59x, the stock price could be maxing out around $750-765/share, but this is a lower probability outcome (~5%) based on several years of recent history.  

Here are somewhat subjective probabilistic attempts to forecast the maximum META stock price through 12/30/27: 

Probability of max share price: 

$945/share = 65%  (+29% total return)

$850/share=  30%  (+16% total return)

$765/share= 5% (+5% total return)

If analyst forecast earnings are too low going forward, the above numbers will be too conservative.  If analyst forecast earnings are too high going forward, the above numbers will be too high.  

References: 

Disclaimer: This blog has been created for sharing my personal investment ideas only. I do not receive any compensation for this blog or the content within. I am not an investment advisor or professional. This blog is my own personal opinion and is not meant to be a recommendation of the purchase or sale of any stock or ETF. Please do your own due diligence and research before deciding to purchase any investments of your own. 


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