Meta Platforms Stock Forecast Is Meta Platforms a Good Stock to Buy?

It raised questions about how much the company would need to invest in the new, virtual world before seeing a return. But the organization did rebrand from Facebook to Meta Platforms to reflect its focus on this project, so indicators for swing trading substantial financial commitments shouldn't come as a surprise. Both Microsoft and Alphabet reported modest accelerations in revenue growth from the fourth quarter, showing that the worst of the tech recession could be over.

Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Volatility profiles based on trailing-three-year calculations of the Que es stop loss standard deviation of service investment returns. Second, Meta's Reality Labs segment, responsible for developing the metaverse, lost a whopping $10 billion in 2021.

  • Meta management may comment on the revenue implications in the Q3 earnings call next month.
  • Li credited "improvement in the macroeconomic landscape" as a big factor in Q3 guidance.
  • All you have to do is build a portfolio of Kits and leave the rest of portfolio management to AI.
  • While management mentioned competition from apps like TikTok, Apple's iOS changes are a big culprit for the low guidance.
  • Out of 36 analysts polled, 23 rated META a buy, 10 a hold, and three recommended a sell.

Mark Zuckerburg retained 22% ownership in the company following the IPO, and 57% of the voting rights. As of 2022, those holdings were down to about 14% of the company and 54% of the voting rights. So, Meta Platforms can unlock an entirely new advertising opportunity with the metaverse, where marketers can spend money on ad space within the virtual world. According to Gartner, 25% of the people are expected to spend at least one hour within the metaverse by 2026 for work, shopping, entertainment, education, or social interactions.

After losing half its market valuation, the social media giant is showing signs of life once again.

Meta Platform’s downtrend began in September 2021 when the pandemic tailwind that had lifted the business’s performance faded on the back of mass vaccinations. META stock is up 14.7% as of Thursday morning and is up 67.9% since the start of the year. One estimate suggests the metaverse will be worth $800 billion in 2024, growing at 13.1% each year, which could mean a $1.6 trillion annual value by 2030. Another estimate suggests it could be worth up to $30 trillion over the next 10 years. Either way, it makes the $10 billion Reality Labs loss look like a drop in the ocean by comparison.

  • The changes weren't yet in place for the first half of 2021, creating tough comparables for the first two quarters of 2022.
  • The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on, top-rated podcasts, and non-profit The Motley Fool Foundation.
  • The prospectus stated the company was seeking to raise $5 billion but it got so much more.
  • That may or may not be true, but Meta shareholders appear to have a similar sentiment today.

If Meta controls a quarter of the digital ad market by then, its ad revenue could increase to $196 billion annually, up 70% from last year's levels. By 2030, digital ad spending is expected to jump to almost $1.5 trillion, indicating that Meta's ad revenue could more than triple in the next eight years. In 2022, however, Meta sees a few headwinds hurting its ad revenue.

The prospectus stated the company was seeking to raise $5 billion but it got so much more. The day before the IPO execs announced it would sell 25% more stock than it had previously stated because of the high demand. The company wound up raising more than $16 billion making it the 3rd largest IPO in history The Intelligent Investor at the time. Meta Platforms, Inc life began in 2004 as a digital “face book” for Harvard students. The company was founded by Mark Zuckerburg and a group of friends but now only Zuckerburg remains. The company quickly grew and expanded into other universities and then opened itself to the public in 2006.

Privacy changes are hurting the ad business

The metaverse can potentially change the way we interact socially and even how we do our jobs. Meta Platforms envisions users existing as virtual avatars of themselves, surrounded by a self-sustaining digital economy that could feature all the popular brands we engage with in the real world. It was a big day for Meta Platforms (META -1.23%) as the tech giant unveiled its new Meta Quest 3, launched new smart glasses with Ray-Ban, and announced updates to its AI products. Meta Platforms (META -1.23%), formerly known as Facebook, has garnered lots of attention recently, primarily due to the causes that led to the name change.

The Meta Platforms share price forecast remains largely bullish according to the algorithmic forecast. Your own due diligence should be performed before trading Meta Platforms stock. But the company has also been consistently profitable in that stretch, which sets it apart from many other technology outfits. It generated $0.46 in earnings per share in 2011, which ballooned to $13.77 last year -- and that's what makes Meta Platforms stock so cheap right now. Meta Platforms is the leader in the social media space by a large amount.

The stock now trades at a price-to-earnings ratio of just 17, which seems like a bargain for a company with the global reach and massive free cash flows that Meta produces. Even if top-line growth slows for a few years as Meta builds up Reality Labs, the company's share buybacks could help generate solid earnings growth for investors. On Wednesday, Facebook's parent reported meager revenue growth of 3% from a year earlier, which was better than analysts were expecting.


The company has also gone all-in on its vision for the metaverse, a virtual reality world. Facebook’s Horizon Worlds launched in August 2022 and was almost universally panned by the internet. The company’s name change from Facebook to Meta suggests it plans to focus on the service going forward. Reality Labs segment revenue grew to $877 million, a 22% year-over-year increase, but lost $3.3 billion; the division is receiving heavy investments and probably won't be profitable for a while. Expenses increased due to higher R&D spending, which Mark Zuckerberg made clear was coming when he announced the company's name change to Meta.

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If that were to happen, Meta's massive advertising business could slow down as companies pull back on spending. Shares of Meta Platforms (META -1.23%), the parent company of Facebook, were rising quickly today on seemingly no company-specific news. Instead, a rebound in the tech sector appears to be sending Meta's stock higher today. Down over 38% so far in 2022, Meta — formerly Facebook — is the worst performing FAANG stock of the year. But many Wall Street analysts are forecasting a strong upward trend in the coming months.

META Media Mentions By Week

What's more, Meta's top and bottom lines are expected to head higher in 2024 as well, as seen in the chart below. Download today for access to AI-powered investment strategies. 2023 promises to be a tumultuous year for investors regardless of their investing strategy. While management mentioned competition from apps like TikTok, Apple's iOS changes are a big culprit for the low guidance. The changes weren't yet in place for the first half of 2021, creating tough comparables for the first two quarters of 2022. Wehner estimated that iOS would cost Meta roughly $10 billion in ad revenue this year.

"There are 1 billion or 2 billion people who have glasses today. I think in the future, they're all going to be smart glasses," essentially wearable computers, Zuckerberg predicted on the Q2 earnings call. The stock has gained more than 6% over the last month and appears to be moving on continued upward momentum. Meta shareholders should keep a close eye on the company's upcoming financial report to see if there are any additional insights from management about inflation or the economy. The tech company is expected to report its next quarterly figures at the end of July or early August.

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