Meta Platforms papers have fallen in price by more than 60% since the beginning of the year, but there are still those who continue to hold optimistic expectations for the long term. Bears, on the other hand, explain the stock’s fall as a consequence of petty ambitions and misplaced priorities. Facebook stock charts do not inspire optimism in investors.
The corporation’s future success will depend on its ability to optimize the user experience through fresh and innovative applications. but at the moment Meta Platforms looks like a very controversial stock, and for reasons of caution, it is better to stay away from it now until the general state of the market improves.
Facebook stock chart – what’s going on?
Meta has been struggling for the last couple of months due to several large fines related to non-compliance with data privacy regulations. Because of this, Facebook stock is down. This includes a €265 million fine from Ireland for Facebook’s 2018-2019 data collection activities.
Meanwhile, the meta-universe project, in which Mark Zuckerberg saw potential, is being forced to pay a high price. The Reality Labs segment loses huge sums each year, and this year alone the cumulative loss exceeds $9 billion.
The company had set a goal of growing its Horizon Worlds active user base by 500,000 monthly by the end of 2022. However, the growth rate was so low that the management had to revise its plan to 280 thousand. As of October, the increase in the number of active users did not even reach 200 thousand. It is fair to say that Amazon US stock price today also has problems.
Moreover, in the third quarter the company received a serious blow – Meta’s sales fell by 4% year-on-year, and operating income fell by as much as 46%, which can’t help but worry investors. All of this points to a bleak outlook for the company and its stock.
Meta was the worst performing company in the S&P 500 stock index basket
As Meta Platforms’ stock price hit new lows, the company became the worst performer in the S&P 500 stock index basket this year as of the end of the week. The social media giant’s stock price is down about 73% for the year, showing the worst performance even when compared to players in the lower tier of the stock market index, such as Align Technology, General Holdings, SVB Financial Group, and Match Group. As mentioned above, AMZN unit stock prices today are also declining.
Meta has faced a lot of problems this year, which forced investors to be more cautious, which led to a drop in the company’s share price. For example, in October Meta reported its second consecutive quarterly drop in sales and issued a weak forecast for the fourth quarter, which was even below analysts’ expectations. Meta attributed the decline in revenue to a variety of factors, including the looming recession, which is causing companies to cut their advertising budgets, and changing privacy rules in Apple’s ecosystem that make it difficult to track user activity online.
Investors are concerned about Meta’s costly meta-universe project. Meta expects to succeed in this to cement its leadership status. However, implementing this project requires huge investment. The Reality Labs division, which develops Meta’s augmented and virtual reality initiatives, has posted a $9.4 billion loss this year alone. What’s more, the company had previously said that losses would continue to grow each year.
Conclusions
On Wall Street, Meta maintains a consensus rating of Moderate Buy. The stock has an average target of $148.12, suggesting a 25.46% upside potential. The range of projected prices ranges from $80 to $260 per share. Follow letizo.com for price updates.
At the moment, Meta Platforms stock may attract potential buyers with its cheapness, but it’s important to keep in mind the increased risks. Yes, advertising revenue has good growth potential if the overall health of the economy improves next year, but the figure should significantly outpace the increase in costs. At the same time, the corporation continues to actively invest in the meta-universe project, which does not yet live up to Meta’s initial expectations. Thus, it is safer to assume a bearish outlook on the securities of the troubled company. Also read more smart export import expedition business guidance for all entrepreneurs dvcodes
