Latest news with #TrefisHQPortfolio
Forbes
24-04-2025
- Business
- Forbes
What's Going On With META Stock?
An illustration photograph taken on April 17, shows the Facebook app available to download from the ... More App Store displayed on a phone screen, in a residential property in Guildford, south of London. (Photo by Justin TALLIS / AFP) (Photo by JUSTIN TALLIS/AFP via Getty Images) Meta Platforms' stock has declined approximately 13% this year, facing headwinds from potential tariff impacts that could affect the company in two significant ways: Despite this year's setback, Meta has demonstrated remarkable resilience over a longer timeframe, with the stock gaining 56% since early 2022, substantially outperforming the broader Nasdaq index's modest 7% increase. This outperformance can be attributed to several key factors: Meta Platforms has delivered impressive revenue growth of 39%, increasing from $118 billion in 2021 to $165 billion in the trailing twelve months. This robust performance stems from multiple growth drivers: Meta's profitability metrics show substantial improvement, with the net income margin expanding from 33.4% in 2021 to 37.9% currently. This enhanced profitability is complemented by a strategic 9% reduction in shares outstanding, made possible by the company's substantial $122 billion investment in share repurchases. The combination of higher revenues, expanded margins, and fewer outstanding shares has resulted in a 73% increase in earnings per share, rising from $13.77 in 2021 to $23.86 in the most recent period. Despite Meta's impressive financial performance across revenue growth, margin expansion, and earnings improvement, its P/E ratio has declined by 10%. This valuation compression can be attributed to several factors: Given these uncertainties, investors should ask themselves critical questions: Do you want to hold on to your META stock now? Will you panic and sell if it starts dropping further? Holding on to a falling stock is never easy. While META remains fundamentally strong with impressive growth and improving profitability, investors seeking to preserve wealth in volatile markets might consider alternative strategies. Trefis works with Empirical Asset Management—a Boston area wealth manager—whose asset allocation strategies yielded positive returns even during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics..
Forbes
07-04-2025
- Business
- Forbes
Can LULU Stock Decline To $100?
Trefis What would your reaction be if Lululemon stock plummeted by 90% or more in the coming months? While that might sound extreme, history shows it's not out of the question. So far this year, the stock has already shed over 30% of its value — including a sharp single-day drop of more than 14% after the company reported its fiscal 2024 results, followed by a 10% dip after Trump's tariff news. Given how the stock has responded to previous economic slowdowns, a drop from its current level near $260 to below $100 isn't entirely implausible. What's striking is that the recent downturn comes despite strong financial results. LULU posted fourth-quarter earnings per share of $6.14 and revenue of $3.61 billion, both beating expectations of $5.85 and $3.57 billion, respectively. Yet, fears around slowing consumer spending, global tensions, and cautious forward guidance have rattled investors. Key insight: In times of economic decline, LULU stock has shown a tendency for steep drops. It lost 36% during the inflation-driven selloff, nearly 47% during the Covid crisis, and over 90% during the 2009 financial meltdown. That last one isn't a typo — market reactions to economic fears can be extreme. So, is Lululemon's current situation comparable to its state during the Great Recession? In March 2009, LULU reported $45 million in operating cash flows and traded at about 12 times that number — an 8% yield. For comparison, over the past year, the company generated $2.27 billion in operating cash flow, translating to a 7% yield on a $31 billion market cap. So what does this mean? While another crash of the same scale seems unlikely given the company's maturity and investor confidence, concerns remain valid. Individual stocks can be much more volatile than broad portfolios. If you're after growth with less risk, the High-Quality portfolio may be a better fit, having outperformed the S&P 500 with over 91% returns since inception. As growth expectations slow and economic uncertainty looms, ask yourself: Would you keep holding LULU stock if it slid to $250, $200, or even lower? It's never easy to stay invested in a declining stock. Trefis has partnered with Empirical Asset Management, a Boston-area wealth manager, whose strategies delivered gains even during the 2008-09 market crash. Empirical includes the Trefis HQ Portfolio in its allocation strategy, helping clients achieve stronger returns and reduced risk compared to the broader market — as shown by the HQ Portfolio performance metrics. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
