The metaverse trend is projected to be one of this decade's hottest growth trends, with some research groups forecasting a global market size from the hundreds of billions of dollars all the way to more than $1 trillion by 2030. Facebook rebranded itself as Meta Platforms (META -0.82%) in 2021, going all-in on the metaverse trend and aiming to be the primary beneficiary of this seemingly massive opportunity. 

Some investors believe Meta Platforms stock is cheap now and will only get more attractive as the metaverse grows. However, CEO Mark Zuckerberg just said seven words that bring much needed perspective to the conversation.

Explaining the "trough of disillusionment"

Building the immersive, interactive digital worlds of the metaverse is a futuristic vision. But it's one that public companies and investors quickly latched on to in 2021. To illustrate, there were precisely zero mentions of the metaverse in the conference calls of public companies in the third quarter of 2020, according to GlobalData. In the fourth quarter of 2021, there were 119 -- a huge jump.

Simply put, metaverse buzz rose quickly. And this is something that troubles Zuckerberg. On a recent episode of the Decoder podcast from The Verge, Zuckerberg said there's potential for metaverse enthusiasts to soon wallow in a "trough of disillusionment" because "it is a vision that's far out."

Business results are measured in years and decades, not weeks and months. Many of us can recite famous words from investing great Warren Buffett like, "If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes." But the practice of patience is harder than many of us like to admit. 

Meta Platforms stock has fallen 60% since it announced its name change on Oct. 28, 2021. I'm sure some shareholders are wondering how a potentially trillion-dollar opportunity has resulted in such a collapse. But circling back to Zuckerberg's seven words, if the metaverse ultimately is a worthwhile pursuit, "it is a vision that's far out."

What to do with Meta Platforms stock

Let's address one of the elephants in the room: Meta Platforms stock is cheap. Trading at a price-to-sales (P/S) ratio under three, the stock has never been this low. Moreover, its price-to-earnings (P/E) ratio is just 10.6. That's more than a 50% discount to the average P/E of the S&P 500, which is 21.4, according to Yardeni Research.

META PS Ratio Chart

META PS Ratio data by YCharts

If Meta Platforms weren't pursuing its metaverse ambitions, its earnings would be higher and its valuation would be even cheaper. The company breaks out metaverse metrics with its Reality Labs segment. Reality Labs delivered a $10.2 billion loss from operations in 2021 and a $5.8 billion loss in the first half of 2022.

A recent report from The Wall Street Journal suggests that Meta Platforms is starting to get more disciplined with its spending. But the point remains: The company is spending billions to pursue its metaverse ambitions, but the payout won't come until years into the future, if it comes at all. 

How long could it take? Back to his interview, Zuckerberg said, "This is what we're here to do for the next decade -- or however long it takes: to build out this next generation of computing that's going to be fundamentally more focused on people and delivering this sense of presence so that you feel like you're right there with another person." [emphasis added]

Meta Platforms has one of the top virtual-reality (VR) hardware platforms with its Oculus devices. And its Facebook and Instagram apps provide it with robust cash flows that it can invest in developing other metaverse components -- more than most companies on the planet. Therefore, if any company is poised to profit long term from the metaverse, it's Meta Platforms.

However, I've personally become uncomfortable with buying Meta Platforms stock because I can see that it will likely spend billions of dollars annually before anything starts paying off. For me, that's not something I'm interested in for my portfolio. If I'm going to make a more speculative investment, I'd prefer it be a small investment in a small-cap stock, not something like Meta Platforms that still has a market capitalization over $340 billion.

That doesn't mean that Meta Platforms will necessarily be a bad buy-and-hold investment. Perhaps you're personally very bullish on the future of the metaverse. In that case, you can't overlook Meta Platforms. However, you need to be aware that it won't all come to fruition overnight. It could take a decade or more. And recognizing this up front can help keep you out of the trough of disillusionment.