Meta Platforms (NASDAQ:META), despite its name change and metaverse focus, is primarily a social media and AI powerhouse. While the company aims for metaverse leadership, long-term investors see value in its cash flow and growth potential. These characteristics are all within Meta’s entire portfolio of businesses.

Experienced or new investors can consider investing in this name for continued upside from here, despite budding macroeconomic uncertainty. Here’s why META stock is worth investing in right now.

Strong Valuation and Financials

META stock has outperformed with more than 40% gains in the past six months. Tthe S&P 500 rose only 2% over the same time frame. Additionally, throughout the last month, it increased by 1.5%. It’s up nearly 160% year-to-date, surpassing the S&P 500’s 10% rise. Meta reported its Q3 2023 earnings on October 25. Investors were eager to see how well it can continue its success. This is all thanks to effective cost-cutting measures and expense guidance reductions earlier this year.

Meta’s recent improvements in financial strength, revenue growth of 11%, and a surge in cash flow demonstrate its stability in a challenging market. With 3 billion monthly active users, it aims to maintain its position among major tech companies.

In the third quarter, Menlo Park, California-based company was expected to earn $3.45 per share on $31.85 billion in revenue, a notable increase from the prior year. Full-year earnings were predicted to rise by 47.6% year-over-year to $12.68 per share, with full-year revenue of $125.33 billion increasing by 7.5% year-over-year. These earnings improvements resulted from various cost-cutting measures that made Meta more profitable and cost-effective, including expense reductions in non-AI servers and spending shifts into 2024.

META is a Revenue Machine

In the first nine months of 2023, 98% of Meta’s revenue came from advertising. After a three-quarter decline, ad revenue rebounded year-over-year in Q1 and accelerated in Q2 and Q3. Apple’s privacy changes, TikTok’s competition, and macroeconomic challenges had slowed Meta’s growth last year.

However, this year, Meta adapted its ad products to counter Apple’s changes, expanded Reels to compete with TikTok, and benefited from increased advertising by Chinese e-commerce and gaming companies, which offset lower average ad prices with higher ad impressions.

Meta’s high-margin ad revenue rebounded, helping to offset losses in its Reality Labs segment, which invested heavily in virtual reality and augmented reality devices. The company achieved its highest operating margin in two years, indicating its ability to balance profits and investments.

Analysts anticipate a 7% revenue and 47% earnings increase for the full year and project a 13% revenue and 24% earnings growth for 2024, as the macro environment stabilizes. These are impressive growth figures for a stock trading at only 17 times forward earnings.

Metaverse Investments May Not Be a Complete Loss

The metaverse, a 3D virtual world for social interaction and digital objects, has gained fresh attention thanks to tech advancements and the pandemic’s impact on remote work and online entertainment. Meta Platforms, led by CEO Mark Zuckerberg, is a key player in this emerging trend.

The metaverse offered Meta Platforms promising opportunities. It extended their services beyond social media, introducing innovative products like Horizon Workrooms for remote collaboration and social and gaming experiences. These ventures tapped into new markets and revenue streams, and there’s a reason why some long-term investors aren’t plugging in negative long-term numbers into their valuation models for this segment.

Bottom Line

Meta diversified its revenue sources with e-commerce, messaging, and virtual reality ventures. Facebook Shops facilitated direct sales on its platforms, enhancing the shopping experience. Messaging apps like Facebook Messenger and WhatsApp amassed a vast user base for business interactions. These expansions pave the way for further growth, making this stock perhaps the best option among the mega-cap tech names right now.

On the date of publication, Chris MacDonald has a LONG position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.