So facebook is it to buy these prices. I mean it's down a lot. Numbers are quite phenomenal, but there are risks. Now this video will show you the opportunities, but also the risks you need to be aware of, if you're, considering putting some money into facebook.

Let's get started so look: it's not an easy market to invest in right. Now. Markets are kind of weak, so you got to look for the companies that are undervalued with great fundamentals and a great growth prospect, not an easy find. I mean you can look at companies like google, like microsoft, they're, definitely in that category, but facebook might be another one of those companies now look.

It's also kind of dangerous right now to trade in general, because i mean a lot of speculators love this crazy volatility. So they create the scales of a market, so i just want to warn you to be careful because there's going to be a lot of shortened volatility, a lot of speculators warping the market. Obviously, if you're stepping in as a long-term investor, you got to ignore all this noise look at the fundamentals of the company. Now, just a few months ago, facebook was trading at 320 dollars ever since then they only gotten better look at the financials, however, the price went down to the 200..

Now that creates an opportunity, but it's not without risks. Now, first of all, let me show you the fundamentals right now: the company is trading at four times sales. That's not a lot considering the fact that everything else across the board is pristine, i'll show in a second. They have great free cash flow.

Operating margin is insane they're, actually insanely scalable, and they don't have a lot of risks internally. As far as expenses and growth look at their operating income, it's growing like crazy, six billion six years ago, 47 billion in 2022 look at the revenue versus cost of goods it's about 6x and it doesn't change when they did 18 billion in revenue. The cost of goods were three now they're doing 120. The cost of goods is only 23 and, as you can see, the gap remains their very scalable business as it should be now.

Does the business generate cash flow? We want our cash flow, 5.5 billion dollars in 2015, now, six years later, 30 billion dollars in free cash flow. That's a company, that's trading at four times sales, with 30 billion dollars in cash flow. Now look cash versus debt 16 and a half billion cash 14.5 debt net cash positive check right. What else do you want in the company? Cash versus liabilities, 16 versus 41 about 40 cash of liabilities, assets, net of goodwill versus liabilities, 145 versus 41.? Three and a half times more assets versus liabilities.

Without goodwill and look, the company doesn't have any crazy expenses, they're monetizing traffic that is based on user-generated content without any competition. In fact, the only risk internally might come from anti-trust issues because of the fact they don't have any competition, but i think that ship sailed a long time ago. I don't think the antitrust authorities, especially in north america, are going to go at facebook at this stage. Now, looking at the company from a broader perspective, there are risks that you need to be aware of, despite the phenomenal numbers.

I just showed you. First of all, you have to understand that facebook is extremely sensitive to currency risks to forex. Facebook is a global business. It's not heavy north america, it has a lot of income, that's coming from abroad and, as you notice recently, the dollar.

Somehow, god knows why is getting stronger and stronger. That means they're getting less and less money from their foreign geographies, where they're operating now. At the end of the day, it's not going to kill facebook, but it's definitely going to cut in into their efficiency now. The other thing you have to remember if we are headed to recession, if we're going through inflation increase rates and then eventually recession, and that seems to be a global thing right now going on, especially with the geopolitics, china, lockdowns commodity crisis, food crisis.

Potentially, if we're going to some bad times, discretionary spending is gon na go down. Advertising spending is gon na go down, at least in the first stage. Companies that rely on ad revenue are gon na take a hit, and facebook is not immune to that, and you have to remember that when you factor in these beautiful numbers so before you decide to either invest or don't, invest. First of all, do your own research.

This isn't financial advice, i mean it, i'm just a dude on the internet. Make sure you talk to a professional, because this my opinion might be inaccurate, might be wrong, might be the complete ramblings of a madman, doctor and advisor, and if you decide this company is for you great and if not also great stick around. We have more stuff coming up real, soon, see you next video.