Will Fb Stock Continue Going Down
Meta Platforms' (META) stock performance has seen a little respite amid what has been a rather bearish year so far. As of 20 July, META was up 11.93% from the previous month, but down 48.08% year-to-date (YTD).
The stock's losses have almost doubled those of the tech-heavy Nasdaq 100 (US100) Index as confidence in the company's ability to keep growing, after its drastic pivot toward the metaverse, is not at its highest point.
Meta Platforms, formerly known as Facebook, has cited multiple headwinds that could negatively affect the business's financial performance in the near term, including changes to Apple's iOS privacy features and increased competition from other platforms such as TikTok and Snapchat.
Meanwhile, macroeconomic conditions in the US have worsened amid a high inflation rate of 9.1% that has prompted a risk-off attitude among market participants.
META stock also slightly declined on 1 June after the company announced that COO Sheryl Sandberg was stepping down after nearly 14 years at the helm. Javier Olivan, the company's chief growth officer, will take the lead, although Sandberg's functions will be spread across the organisational structure, as part of a new scheme Meta Platforms CEO Mark Zuckerberg has devised to run the business more effectively.
"I think Meta has reached the point where it makes sense for our product and business groups to be more closely integrated, rather than having all the business and operations functions organised separately from our products," said Zuckerberg.
What should be expected from this social media stock, 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 FB stock projections for 2022, and possibly beyond.
Meta Platforms stock analysis: Technical views and price drivers
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.
The decline accelerated in November and peaked in February 2022 after management made downbeat comments about the company's future growth and Meta Platforms reported a slight decline in Facebook's daily active users (DAU) in Q4 2021. This was the first time that such a deceleration had occurred for many years, with shares falling more than 26%.
On 31 May 2022, Meta Platforms announced it was changing its ticker symbol to 'META', replacing the previous ticker 'FB' which had been used since the company's initial public offering (IPO) in 2012. According to the company: "The new ticker symbol aligns with the company's rebranding from Facebook to Meta."
The start of July saw a more favourable turn as META stock hit an uptrend amid the volatility, rising 11.93% from 20 June, as of 20 July.
However, the stock was trading nearly 50% below its 52-week high and 30% below its 200-day Simple Moving Average.
The META technical analysis indicated that momentum remained unfavourable. The Relative Strength Index (RSI) was standing at 54.88 (neutral) and had not moved to overbought levels in months. This typically means that buying interest is fairly subdued. However, the Moving Average Convergence Divergence (MACD) indicated 'buy' at -2.85.
Meta Platforms fundamental analysis: Latest earnings
On 27 April 2022, Meta Platforms reported its financial results covering the first quarter of the 2022 fiscal year.
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.
In regards to its operating metrics, daily active people (DAP) from Meta's family of apps increased 6% compared to the same period a year ago at 2.87 billion. Meanwhile, Facebook's daily active users (DAU) and monthly active users (MAU) experienced a 4% and 3% year-on-year increase, respectively.
Income from operations stood at $8.52bn, resulting in a sizeable decline compared to the $11.38bn the company reported a year ago amid higher operating losses from the Reality Labs unit. As a result, Meta's operating margin fell to 31%.
Compared to the previous year, Meta's headcount rose 28%. As of 8 June, the company now employs 77,805 people.
By the end of this period, Facebook had no long-term debt, while its liquid reserves – composed of cash, equivalents, and marketable securities – stood at $43.89bn. In addition, the company produced free cash flows of $8.52bn, resulting in a 9% jump compared to Q1 2021.
What's next for the META projected stock price? Read on to learn the latest META stock outlook.
META stock price prediction: Analyst sentiment
The consensus recommendation from analysts surveyed by MarketBeat, as of 20 July 2022, was bullish. Of 46 financial services companies rating the stock, 33 gave it a 'buy', one a 'strong buy' rating, 10 'hold' and two 'sell'.
The analysts set an average META stock price target at $289.58 a share, resulting in a 64.74% potential upside from its 19 July closing price of $167.23. The highest 12-month Meta Platforms share price forecast from analysts was $466 and the lowest was $215.
Since April 2020, most analysts have lowered their price targets for the firm. One notable contrarian opinion came from Citigroup, which upgraded Meta Platforms from 'neutral' to 'buy' on 20 April. This upgrade came only days after the American bank issued the report Metaverse and Money: Decrypting the Future, in which it discussed the potential of this up-and-coming industry.
According to Citi, the total addressable market for the metaverse could be $8trn-$13trn by 2030, while the number of users could rise to five billion, or 65% of the global population.
Meanwhile, according Ali Mogharabi, senior equity analyst at Morningstar, the resignation of Meta's long-tenured COO should not affect the company's prospects, as she had "surrounded herself with talented colleagues over the years".
"For this reason along with the firm's network effect moat source that continues to attract advertisers to its various platforms, this announcement does not change our $384 fair value estimate of Meta or our exemplary rating of the firm's capital allocation.
"We view the departure of Sandberg as another indication of Zuckerberg and the firm's focus on metaverse. However, we do not believe Meta's leadership team will lose sight of just how successful its advertising business has been and can still be going forward. We think for this reason, Zuckerberg stressed that the firm will try to integrate its various business and product groups, which we believe will allow the firm to more efficiently and quickly cross-sell to advertisers and users, possibly accelerating adoption of its metaverse platform, Horizon, by both," said Mogharabi.
Meta Platforms (META) stock forecast: Targets for 2022-2025 and beyond
Algorithm-based forecasting services gave a bullish long-term Meta Platforms stock forecast, as of 20 July.
WalletInvestor expected the META future stock price to end 2022 at $175.548. Looking forward, it anticipated the stock could move to $208.305 by the end of 2023 and hit $273.876 by the end of 2025.
Although the service did not provide price targets for 2030, its five-year Meta stock forecast expected it to reach $325.567 in June 2027.
TipRanks also offered a bullish META prediction, suggesting the stock could rise to an average of $263.56 in 12 months' time. Out of 38 analysts polled 29 rated META a buy, seven a hold, and two recommended to sell.
These predictions have been drafted by algorithms based on an analysis of Meta Platforms' historical stock price performance. There are no guarantees that the price of META stock will reach those levels. Your own due diligence should be performed before trading Meta Platforms stock.
Note that algorithm-based predictions can be wrong. Past performance is no guarantee of future returns. Always conduct your own analysis before trading. And never trade money that you cannot afford to lose.
FAQs
Is Meta Platforms stock a 'buy', 'sell' or 'hold'?
According to analysts surveyed by MarketBeat, as of 20 July 2022 Meta Platforms stock could be a 'buy' – 34 of 46 analysts covering the stock have rated it as such.
This is not a recommendation to invest in META stock. Your own due diligence should be performed before trading Meta Platforms stock.
Analysts' predictions can be wrong. Past performance is no guarantee of future returns. Always conduct your own analysis before trading. And never trade money that you cannot afford to lose.
Is Meta Platforms stock a good buy?
According to the majority of Wall Street analysts' forecasts compiled by MarketBeat, as of 19 July, Meta Platforms stock could be a buy at current levels. In addition, forecasting services WalletInvestor and TipRanks supported the bullish outlook.
Your own due diligence should be performed before trading Meta Platforms stock.
Note that algorithm-based predictions can be wrong. Past performance is no guarantee of future returns. Always conduct your own analysis before trading. And never trade money that you cannot afford to lose.
Why has the Meta stock price been going down?
A deterioration in macroeconomic conditions in the US in the form of expected interest rate hikes, along with company-specific factors such as an unexpected decline in Facebook's daily average users (DAUs) in the fourth quarter of 2021, have contributed to pushing the valuation of Meta Platforms lower since September 2021.
How high can Meta stock go?
According to estimates from WalletInvestor, as of 19 July, META stock could rise to $325.567 by the end of 2027.
Where will Meta Platforms stock be in 5 years?
According to estimates from WalletInvestor, as of 19 July, the price of Meta Platforms stock could rise to $325.567 in June 2027.
Related reading
Source: https://capital.com/meta-platforms-fb-stock-forecast
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