FB: Where will Meta stock go next? Wall Street analysts share their targets May 16, 2023
The company’s earnings are expected to head south as well, to $12.52 per share, an estimated drop of 9%. The Facebook parent now has a market cap of $546 billion, which is a sharp decline from its $1 trillion-plus market cap just six months ago. When Meta Platforms released its 2021 full-year earnings report, there were two key reasons its stock plunged. Meta stock has bounced up by 18% over the last ten days, and investors might be wondering if it had already hit bottom when shares plunged to a 52-week low of $185.33 earlier this month. The rally arrested an overall decline of 51% since September 2021 amid disappointment about the company’s full-year earnings report and the broader tech market sell-off. Meta is expected to ink some $15 billion in free cash flow in 2022, according to estimates from Refinitiv, a 60% decline from 2021, in large part because of spending on the virtual universe.
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. Meta spends a ton of money on https://investmentsanalysis.info/ 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.
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During the three months ended 31 March, the company reported total revenues of $27.9bn, resulting in a 7% year-on-year jump. Of that total, $695m came from the Reality Labs unit, the company’s metaverse-focused business segment. As a result, the metaverse could create another sphere for digital marketers to target. Bloomberg estimates that the global metaverse market could generate $800 billion in revenue by 2024, while another estimate puts the size of the market at $1.6 trillion by 2030. All of this indicates that the metaverse could be the next growth frontier for Meta Platforms.
- The ROIC measures how well a company generates cash flow relative to the capital it has invested in its business.
- I’m talking about a possible ban of the controversial video-sharing platform.
- But the earnings report sent a clear message that the business is changing.
- Currently, Meta Platforms trades at $277.64 per share, with a market cap of $714.40 billion.
- Meta is expected to experience a similar loss in its Reality Labs segment in 2022, so it’s clear that the company has a lot at stake in regards to its long-term vision of the metaverse.
While the next potential triple-digit move for shares may take some time to play out, META stock remains a strong opportunity for growth investors. Rather than make Meta shareholders collectively pay for Zuckerberg’s ambitions, he could fund them himself through dividends from the parent company. If all the cash flow from operations went back to shareholders, representing about $18 a share, Zuckerberg would find himself with some $6 billion to reinvest in the project based on his stake.
This segment produces virtually all of the revenue which is in turn 97% advertising oriented. Reality Labs develops and markets a line of virtual and augmented-reality products. Analysts expect Meta Platforms’ earnings to increase at an annual rate of 21% for the next five years. However, the secular growth of its end market and the addition of new revenue opportunities due to the metaverse could help it grow at a faster pace.
That’s not enough given current spending plans, but a few key investors who sign on to his vision might be keen to invest alongside him. According to analysts surveyed by MarketBeat, as of 2 November 2022, Meta Platforms stock could be a ‘buy’ – 29 of 50 analysts covering the stock rated it as such. The Meta Platforms share price forecast remains largely bullish according to the algorithmic forecast. Always conduct your own analysis before trading, and never trade money that you cannot afford to lose. What should this social media stock expect, considering the current environment and the management’s plans to reshape its business model? In this article, we analyse the latest Meta Platforms stock news along with its price action and fundamentals to outline plausible META stock projections for 2022 and beyond.
Here’s How Much Meta Stock Could Surge Thanks To Twitter Rival Threads
Mark Zuckerberg, the company’s CEO, stated in the recent earnings announcement that Meta plans to continue prioritizing Reels ahead of core business segments like news feed and stories. 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. According to estimates from MarketBeat, as of 2 November 2022, the analysts set an average META stock price target at $170.93 a share. The highest 12-month Meta Platforms share price forecast from analysts was $375 and the lowest was $80.
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. As for Meta’s pivot to the nascent virtual world of the metaverse, the project continues to bleed cash. The Reality Labs division, responsible for developing software and hardware for the metaverse, lost $3.99 billion in the first quarter after losing $13.72 billion in 2022.
META stock price prediction: Analyst sentiment
Still, investors are probably more in tune with reality now after the earlier excitement. No discussion of Meta is complete without covering its shift toward the metaverse. As a longtime social media juggernaut, Forex arbitrage Meta has decided to take its business in several new directions. In the near-term, the company is focused on enhancing its Reels segment, which involves short-form videos similar to what you see on TikTok.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Piper Sandler analysts, who also have a buy rating on the stock, said Meta is in a favorable revenue position for the rest of the year. They noted that “user growth remains strong” and said the business can keep expanding even with lower headcount.
Why did Meta stock go up?
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. But whether or not the weakness is over, this company is a great addition to any stock portfolio for the long term. “Meta successfully ‘passed the baton’ from cost cuts to revenue re-acceleration,” the analysts wrote. Even with the hot start to the year, Meta shares are still about 37% below their record high from September 2021. 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.
When compared to the GF Value of $331.3, the stock appears to be modestly undervalued. This comparison provides a basis for a deeper exploration of the company’s value. Revenue grew by a respectable 20%, and that was after a 33% growth in 2020! The real problem was in the weak guidance — Meta guided for revenue to grow just 3% to 11% year over year in the first quarter of 2022. Shares of the social media giant exploded more than 20% in midday trading on Thursday following a whopper of an earnings shortfall.