For many investors, there's a lot to worry about with Meta Platforms (META -2.15%).

Some anticipate less ad spending as corporate America deals with inflation and supply chain worries. Others are concerned about social-media competition from the likes of TikTok. Still, more don't like Meta's heavy spending to fulfill CEO and founder Mark Zuckerberg's vision of the metaverse as the company's "next big thing" for growth.

But let's strip all that out for a moment. Let's briefly ignore Meta's huge profile as a closely watched, mega-cap valued at $560 billion. If we just look at Meta Platforms as vanilla stock, there's a ton for investors to like with its solidly profitable underlying business and significant amounts of cash flow. 

That's especially the case with the stock price down almost half (at the time of this writing) since last September. At these levels, the stock has that rarest of combinations for a tech company-offering investors both growth and value.

A person holds a smartphone while looking at a social media page.

Image source: Getty Images.

Meta by the numbers

As executives noted in the first-quarter conference call with analysts, Meta continues to ramp up expenditures. Total expenses reached $19.4 billion, a 31% increase from year-ago levels. Much of the spending is aimed at building out the tech infrastructure for its metaverse ambitions.

The metaverse -- a 3D online universe where users can interact -- may or may not be the company's next growth catalyst. But for now, advertising remains its bread and butter, generating $115 billion in revenue last year. The advertising revenue represented a 36% year-over-year growth in 2021.

In its recent quarterly conference call, the company cited a number of reasons for the disappointing results. Advertisers and consumers spent less. The war in Ukraine added further to the slowdown. Yet Meta still reported better-than-expected profits of $2.72 a share.

The results also keep Meta solidly on track to hit analysts' profit estimates of more than $12 this year-down slightly from last year's pandemic-fueled levels of $13.77. But in 2023, Wall Street expects Meta's profit to rebound almost 20% to a record $14 a share, and rise even further to $16 in 2024.

Is Meta a buy now?

Based on those numbers and profit growth rates, how do we know whether Meta's stock is a good value or not?

One way that analysts value a company's stock is by calculating its price to earnings (P/E) ratio. Just divide a company's share price by its annual earnings per share. It's by no means foolproof-nothing is. But it's a good "back of the envelope" method to quickly measure a stock's price against its potential value.

Using Meta's 2021 profits, we can say that the stock is currently trading at one of its lowest P/E valuations since the IPO a decade ago. Sometimes that's a warning sign for investors if Wall Street suspects that a company's best days of growth are behind it. But clearly, that's not the case with Meta. Analysts are still forecasting double-digit percentage profit growth for each of the next 2 years. 

There's something else many investors overlook with Meta. 

Despite Meta's heavy investment in its metaverse, the company has more than $44 billion in cash on hand and reported a free cash flow of $8.5 billion just in the first quarter this year. Free cash flow is very important. It's a good indicator of a company's financial health and ability to succeed in the long term. If you look at a top investor like Warren Buffett, one of the reasons he invested in a tech company like Apple back in 2016 was because of its prodigious amounts of cash flow.

For Meta, cash flow means it has plenty of money to do things that bring immediate value to its shareholders-like buy back its own stock. Think of a "profit pizza" where every slice that's bought and removed by the company, makes all the remaining slices that much more valuable. To that end, Meta said it repurchased $9.4 billion of its shares in the first quarter alone-with a "war chest" of $29 billion designated for more such buybacks in the future.

The point is, Meta's stock price is low enough that investors are buying the underlying business -- and the growth potential of Zuckerberg's metaverse -- at a very reasonable price.