Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 1 Jun 2026
META· Communication Services
Meta
Meta is a wonderful advertising toll booth priced like a certainty, with an owner earnings yield of just 2.9 percent.
Buffett fit
Strong fit
Owner
84
Durability
76
Management
82
Price
33
Score updated 22 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Communication Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Meta, I would be delighted with the storefront and uneasy about the spending.
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Three billion people use these apps daily, and the network effect is real.
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Management has done two smart things. It has shrunk the share count by 2.7 percent a year, which is buying back stock the right way, and it earns a 20 percent , well above its cost.
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There is none worth the name at this price. A 22.7 times and a 2.9 percent yield mean I am paying full freight for a business that must keep growing fast to justify it.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 81.9 percent shows the core advertising engine is one of the most profitable business models in the world.
- 2 of 41.2 percent means more than 40 cents of every revenue dollar reaches operating profit.
- 3 of 20 percent over the trailing year, and 22.2 percent over five years, proves capital is put to genuinely productive use.
- 4Share count shrinking 2.7 percent a year rewards patient owners by concentrating their stake.
Concerns
7- 1The stock is expensive: a 22.7 times and a 2.9 percent yield leave no and demand years of fast growth just to break even.
- 2 is only 76 percent of net income, a sign that heavy capital spending is siphoning off reported profit before it reaches owners.
- 3A 38.3 percent peak earnings decline in recent memory shows the business is more cyclical and fragile than its margins suggest.
- 4Enormous and open ended spending on AI and the metaverse could destroy value if the returns never arrive.
Price history
$698+114.9%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Meta rents attention. It gives away Facebook, Instagram, and WhatsApp for nothing, then sells the gathered eyeballs to advertisers, and it does so at an 81.9 percent and a 41.2 percent that few businesses on earth can match. The trouble is that it is now spending enormous sums chasing artificial intelligence and a metaverse that may or may not pay, so the question is not whether the core earns money but how much of that money leaks out the back door.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Communication Services
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