Meta Platforms (META 2.33%) has taken shareholders on a roller-coaster ride in the past few years. In November 2022, it was down 76% from its September 2021 peak. But over the past 16 months, it has come roaring back. Shares are up 454% since the 2022 low.

Zooming out, this social media stock has been a huge winner, turning a $1,000 investment in March 2014 to $7,340 today. That's good for a monster return of 634%.

Before considering whether Meta Platforms makes for a smart investment, it's worth first taking a look at its past and where it stands today.

Connecting the world

Originally known as Facebook, this company started as a small social networking service used on college campuses. Riding the expansion of the internet and the emergence of smartphones, Meta Platforms has transformed into one of the most dominant tech enterprises on Earth.

Today, the business has four main apps under its umbrella: Facebook, Instagram, Messenger, and WhatsApp. Combined, they have a jaw-dropping 3.2 billion daily active users. Not only is it impressive that 40% of the world's population interacts with a Meta service once every 24 hours, but it's equally astounding to know that the figure was up 8% year over year. There is still growth to be had, particularly in emerging economies.

From a competitive standpoint, Meta's massive user base benefits from a powerful network effect. As more people join, there are exponentially more connections to be made. And there is the potential for more content to be created, making the service more valuable to everyone. Anyone can start a social media app from their basement or garage, but it would be impossible to scale up to Meta's level.

The remarkable success of these apps has created one of the most profitable companies ever. Meta generated 98% of its $135 billion of revenue last year from advertising activities, a high-margin business line. The company's overall operating margin came in at 35% in 2023. And in the last decade, it has averaged a superb 38.5%.

Zuckerberg's ambitions

Meta produced $71 billion of operating cash flow last year. Besides directing this capital to stock buybacks and a newly announced dividend, founder and CEO Mark Zuckerberg is focused on building out the metaverse, which is where he thinks the future of this business lies. This is a combination of virtual worlds that users can interact with for different use cases.

Critics aren't too pleased with this, believing that it's a huge waste of money with no assurance there will be any positive results. That view is understandable, as the Reality Labs division posted an operating loss of $30 billion combined in the last 24 months on just $4 billion of revenue.

But it's hard to bet against Zuckerberg, based on his successful track record. He thinks the metaverse will be the next major computing platform, after PCs and smartphones. And he wants to be the leader. If it all works out, Meta will have a nice tailwind that can generate even greater revenue and profit down the line.

Based on the constant change that happens in the tech world, it's anyone's guess what Meta will look like 10 years from now. There's a high probability its social media apps will still rule the day, but should the metaverse gain broad adoption, it could be a bigger driver of financial results.

Is the stock a buy?

According to consensus analyst estimates, Meta's revenue and earnings per share are expected to increase at compound annual rates of 14.1% and 21.4%, respectively, over the next three years. Should these results actually become a reality, then there's a lot for shareholders to get excited about. Even at this scale, the business has meaningful growth potential.

The stock is trading near all-time highs, but it doesn't look expensive. The current forward price-to-earnings ratio of 25.1 is a reasonable valuation given the dominance of Meta. It still looks like a smart investment today.