Meta Platforms (formerly Facebook) has been through a rough patch lately. Its stock lost over 70% of its value in 2022 amid slowing growth, rising costs, and competition. But after Meta’s blowout Q4 2022 earnings report, its stock rocketed up 20% in a single day! 

So is Meta a value stock now? We decided to dig deeper into the numbers to find out.  

Let’s start with the basics – Meta’s valuation. Even after the post-earnings pop, Meta’s forward price-to-earnings (P/E) ratio stands at 24, below its 10-year average P/E of 26. Meta looks relatively cheap compared to other tech giants like Google and Microsoft.

Next, Meta’s growth prospects look bright. The company expects its revenue to grow 14-16% in 2023. Its earnings per share are forecasted to jump over 24% annually over the next 2 years. Those are some tasty growth rates for a “cheap” stock!

And historically too, Meta has put up strong growth – 19%+ sales growth and 14% earnings growth over the past 5 years is darn impressive at Meta’s scale. 

Here’s another sign Meta may be maturing into a value stock – it announced its first-ever quarterly dividend of $0.50 per share. Mature, shareholder-friendly companies tend to pay dividends.

But being a value stock isn’t just about being cheap or paying dividends. Most fundamentally, value stocks generate high returns from reinvesting their capital. And Meta does reasonably well on that front too. 

Over the past decade, Meta has generated an average of over 20% annualized returns on its invested capital. That means that every $1 invested in Meta’s business has created $0.20 in annual profits. Not stellar, but solid.

So despite its growth tilt, Meta is cheap compared to history, pays a decent dividend, and earns reasonably high returns on capital deployed in its business.

That checks several boxes for qualifying as a value stock in my book. Meta seems to be gradually maturing from a “growth at any cost” tech darling into a steadier, cash-flow-generating value stock.

Of course, Meta does face risks like any other business. Its costs could stay stubbornly high. Or TikTok could eat its lunch. But as investors, we have to weigh risks against potential rewards.  

After its massive crash in 2022, Meta stock offers a tempting risk-reward given its improving fundamentals and undemanding valuation. For a dominant franchise like Meta’s growing sales double-digits, a forward P/E of 24 is a bargain.

At current levels, Meta stock offers both growth and value. That’s why we believe Meta has emerged as an underappreciated value play in big tech.

So what do you think – does Meta qualify as a value stock in your eyes at current prices? Let us know in the comments!