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If META merely sustains its current forward earnings multiple of 21, it may not take long for the stock to re-hit past all-time highs, hit during 2021. In the event the company beats the high end of expectations, and experiences some multiple expansion, hitting $400, $450 or perhaps even $500 per share within the next two years could be within reach. Those gains combined with Meta’s aggressive cuts and its promise of an efficient 2023 drove stock prices up around 15% in trading after-hours. Meta took a notable beating in 2022’s market turndown, losing as much as 60% of its value over the course of the year. Shares of the tech giant, the owner of Facebook, Instagram and WhatsApp, climbed more than 23 percent, its biggest daily gain in nearly 10 years.

Facebook owner Meta had a turbulent 2022, seeing its stock value decline from more than $325 to less than $90 in November. The company also laid off more than 11,000 employees in November as it looked to cut costs. “Meta timed the launch well given a slew of issues at Twitter since Musk’s takeover and appetite for many to have an alternative option,” Zino wrote. Some 10 million users signed up for Threads in its first seven hours of existence after launching Wednesday evening. Meta spends a ton of money on research and development, so I wouldn’t be surprised to see the company eventually find a workaround for the iOS challenges. However, it’s having a significant impact on Meta’s short-term operations.

Worldwide uncertainty about a potential future recession, as well as the war in Ukraine, have also made investors skittish and caused many to flee stocks for safer harbors. The Federal Reserve’s response of boosting interest rates, with many expecting rate increases to continue through 2023 worsened the slump. Meta is a company that needs to prove itself as it changes directions toward the metaverse, but if you buy the story behind it, it’s hard not to like the stock at this price. “With better monetization, additional room for cost efficiency, and increased scrutiny of TikTok, we continue to like the setup for FY23,” wrote the analysts, who recommend buying the stock. Even with the hot start to the year, Meta shares are still about 37% below their record high from September 2021.

The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. Right now, sell-side consensus calls for Meta Platforms to report earnings of $14.80 per share in 2024, and $16.98 per share in 2025. The high end of these forecasts call for earnings of $17.15 and $19.90 per share, next year and the year after next, respectively.

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. We’ll learn more when Meta releases its first-quarter earnings report after hours today. Analysts are expecting revenue to dip 0.9% to $27.65 billion and for earnings per share to fall from $2.72 to $2.03.

Stock Price Forecast

As flexible as open-source models are, there are fears they could be used for malicious purposes, such as spreading misinformation or infringing on copyright. The Journal reported that Meta’s lawyers had raised concerns about potential misuses of the company’s AI model. Open-source models are free to access and allow users to modify and use the AI however they want, although Meta’s models have restrictions and users must follow the company’s terms of service. Shares of Meta Platforms (META -1.92%), 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. In the call, Meta’s chief executive called out Instagram Reels and the company’s algorithmic recommendation engine as two major areas of focus in the coming months.

Leading up to the launch of Threads, Musk and Zuckerberg entered into a public feud, with each of the middle-aged tech bros showing off their martial arts training ahead of a possible fight between the two. Tesla, the electric vehicle maker helmed by Musk, dropped as much as 65% last year as Musk completed his controversial takeover of Twitter. Get this delivered to your inbox, and more info about our products and services. Now, Wall Street’s betting that Meta can slowly start to revive growth, with comparisons becoming easier after a weak year in 2022 and newer products beginning to show better traction. However, following a 15% rally on Thursday to over $241, Meta’s shares are up 170% since bottoming at under $89 in November.

It has fallen significantly from its previous highs but remains a behemoth in the world of social media. That could mean right now is the time for interested investors to buy in at a discount. Another reason could be reports of layoffs at TikTok owner ByteDance. TikTok is a rising power in the world of social media, so any bad news for TikTok is good news for companies like Meta and Twitter.

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. Many, including major businesses like Uber

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, continue to operate without generating a profit, with their high valuations based on expected expansion and future profitability. When money gets tight, investors look for more sure-fire investments and profitable firms. This quarter was the first under Meta’s new reporting structure, where it pulled its social media platforms and metaverse segments apart, showing how they each stand on their own.

Alphabet reported a modest 0.2% revenue decline in its advertising business, but that was an improvement from a 3.6% decline in the fourth quarter, another positive sign for Meta. 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. A financial advisor can help you understand the advantages and disadvantages of investment properties. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors.

What makes Meta’s user base even more attractive to advertisers is that people willingly reveal information about themselves, such as age, marital status, favorite movie, etc. This is all information marketers can use to target their advertisements more efficiently. Meta’s rise today, while certainly good news for shareholders, should also be viewed cautiously.

They lost two-thirds of their value last year, as the company reckoned with by far its toughest stretch since its IPO a decade earlier. For the most part, investors have been jumping on Meta’s cost-cutting story and two rounds of job reductions, which began in November and are continuing in the first half 2023. In February, CEO Mark Zuckerberg said this would be the company’s “year of efficiency,” a declaration that sent the stock up over 20%. Meta has increasingly shifted its focus towards AI as interest in the burgeoning technology has skyrocketed, with Zuckerberg describing it as a key theme for the company in a recent earnings call.

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. However, on the revenue side, the company should continue to kick its goals, with $132 billion in estimated 2022 sales representing 12% growth over 2021. But whether or not the weakness is over, this company is a great addition to any stock portfolio for the long term.

The social media giant has been battered, but it could make a sizzling comeback.

The company generated $12.5 billion in free cash flow in Q4 2021, a 35% year-over-year increase, even with the additional spending. Meta Platforms, Inc., engages in the development of social media applications. It builds technology that helps people connect, find communities, and grow businesses.

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. It is not surprising to see why Meta’s growth rate is expected to improve in the coming years. The company had a daily active user base of 1.9 billion in December 2021. Its monthly active user base stood at 2.9 billion at the end of last year. This huge user base makes Meta an ideal avenue for advertisers to spend their dollars and reach a wide audience. The company points out that “increased competition for people’s time and a shift of engagement within our apps” toward verticals with low monetization could weigh on its ad revenue growth.

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Meta Soars by Most in Decade, Adding $100 Billion in Value

In the spring, Apple launched changes to its iOS platform to limit how digital advertisers tracked and targeted iPhone users. If you have an iPhone, you have probably seen this; apps will ask you to opt into being tracked. Users can opt out of being tracked, making Meta’s advertising platform less effective. The company began to feel its impact in its 2021 Q3, but management revealed the full scope of its effect in Q4. The good news for META stock starts with its diluted earnings per share of $2.20. That’s better than the $1.95 per share Wall Street was expecting in Q1 even if it’s a 19% drop year-over-year (YOY) from $2.72.

• Shares of Meta inched up nearly 1% in early trading, moving against broader market losses and are on their way to their highest close since last February.
• On the contrary, trading at a price-to-free cash flow of 26.5, it’s near the lower end of its range of the last five years.
• “Meta timed the launch well given a slew of issues at Twitter since Musk’s takeover and appetite for many to have an alternative option,” Zino wrote.
• The Journal reported that Meta could release the model, which is expected to be significantly more powerful than the company’s recently released Llama 2 AI, at some point next year.

Assuming a similar multiple in 2030, Meta Platforms’ stock price could hit $1,865, which would be nearly nine times the company’s closing stock price on March 2. Meta looks like a company in a transition period; its social media networks aren’t delivering the type of growth that investors might have come to expect. Still, Meta is about as close to being a social media monopoly as you can get, and the business is generating more free cash flow each quarter than most companies do as revenue in a year. Social media giant Meta Platforms (META -1.92%) recently reported earnings for its 2021 fourth quarter, and the results shocked investors enough to sell the stock down more than 20%.

The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, and Nvidia. Meta’s apps are free to join and use; the company https://bigbostrade.com/ makes money by showing its users advertisements. Of course, marketers are willing to pay more if their ads can be delivered to more people.

Meta Platforms Inc. stock underperforms Tuesday when compared to competitors

These include the implementation of widescale layoffs, as well as the company’s scaling back of its metaverse plans. That could very well signal that Meta’s advertising business, which makes up the vast majority of its revenue, reached a nadir in the fourth quarter as well. Meta Platforms (META -1.92%), formerly known as Facebook, has garnered lots of attention recently, primarily due to the causes that led to the name change. The company has highlighted that it will be investing aggressively to become a leader in the metaverse. 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.

Why Did Meta Stock Go Up This Week?

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. Over 2.9 billion people used its social networks each month during 2021, helping the company to generate $117.9 billion in full-year revenue. That’s a massive leap from the $3.7 billion in revenue Meta delivered a decade ago, in 2011. Over the years, Facebook acquired a large number of apps and other businesses that include but are not limited to Instagram and WhatsApp. The company changed its name to Meta Platforms DBA Meta in 2021 to reflect its business and mission better.

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. But the earnings report sent a clear message that the business mt5 indicators is changing. The market’s reaction doesn’t seem to think so, but things might not be what they seem. Here are three major takeaways from the quarter that could clue investors in on whether Meta is a buy or not.