Meta Platforms (NASDAQ:META) has experienced a significant surge in its share price this year. In fact, this stock has outperformed the Nasdaq by more than 100%, for a variety of factors. Strong profitability and growth are certainly what most investors focus on.

However, the company’s heavy investments into the metaverse poses a top risk for the company. Thus, this is certainly not a stock without its own set of risks, which were certainly priced in last year.

It appears calmer heads are prevailing, and investors are seeing the value Meta provides in a relatively muted valuation.

The company has been reinvesting in its successful platforms like Instagram, while implementing cost-cutting measures through layoffs and other strategic moves which appear to be working.

Let’s dive more into why Meta could be a great stock to buy and hold at current levels. Indeed, there isn’t much in the mega-cap tech space that looks attractive, outside of Meta and one or two of its peers.

META’s Valuation

Since its inception in 2004, Meta Platforms has undergone a remarkable transformation, becoming a global powerhouse in communication and information consumption.

Its stock performance has been equally impressive, with significant growth since its IPO in 2012. Despite occasional volatility, Meta has demonstrated resilience and long-term growth potential, making it an enticing option for investors.

Meta Platforms Inc. shows strong financial health and robust profitability and growth trends. Meta’s gross margin of 78.4% surpasses the industry average, and its net margin of 18.27% outperforms the median.

The company’s three-year revenue growth rate of 20.6% is equally impressive. Looking ahead, Meta should continue its growth with a higher total revenue growth rate than the industry average.

Meta’s shares appear undervalued based on a wide range of valuation metrics, in the company’s peer group. Thus, for those seeking undervalued tech stocks (which are very hard to find right now), Meta should be among the top picks in 2023.

Why This Stock Should Remain Strong

Past performance doesn’t guarantee future outcomes, but Meta Platforms’ impressive track record is worth noting. Now, there are compelling reasons to consider investing in Meta stock.

The company’s shift towards the metaverse indicates its aspirations for growth beyond social media, offering potential in entertainment, commerce, and social interaction within a virtual world.

In addition, Meta has demonstrated its ability to navigate through market shifts and regulatory hurdles. Despite privacy issues, antitrust inquiries, and advertising boycotts, Meta has sustained its user base and revenue streams. 

Meta’s financial performance remains robust and stable, reflecting a strong balance sheet and cash flow. In Q1 2023, the company recorded revenue of $28.65 billion, a 3% increase compared to the previous year.

Net income reached $5.7 billion, marking a 23.52% year-over-year growth, while operating cash flow amounted to $7.227 billion, a 15.22% year-over-year increase.

With total assets of $184.491 billion and total liabilities of $59.696 billion, Meta maintains a favorable debt-to-equity ratio of 0.08. These numbers indicate Meta’s resilience and ability to navigate short-term market fluctuations.

META Stock is an Investment to Buy and Hold

Meta’s dominant position in the digital advertising market and its expansion into new areas indicate significant long-term growth potential. With an expected 25.2% share of the global digital ad market in 2021, second only to Google, Meta is poised for success.

Advertising revenue is projected to reach $102.19 billion, demonstrating Meta’s strong foothold in the industry. The company’s ventures into e-commerce, messaging, and virtual reality offer new revenue streams and growth opportunities.

For example, Facebook Shops enables direct product sales on Facebook and Instagram, enhancing the user shopping experience.

META stock provides an enticing opportunity for investors to capitalize on its leadership in digital advertising and metaverse innovation.

Despite obstacles, Meta has demonstrated resilience and innovation, making it an appealing option for long-term investors. Most notably, the company’s valuation is hard to beat, particularly among companies with a market capitalization of around $750 billion.

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