Stock Idea Meta Platforms: Recent share price wipeout is li | FSMOne SG - Research Highlights

Stock Idea

Meta Platforms: Recent share price wipeout is likely a knee-jerk reaction

——————————————————

• Share prices tumbled over -30% post its 4Q21 earnings results, as investor sentiment was dampened by the earnings miss, slowing user growth, and weak guidance for 1Q22.

• However, it was not all bad news. Revenue did not miss estimates and grew fairly decently at 20% year-over-year (YoY), and management announced that good progress was made on working around the privacy changes.

• Other positives included progress on Instagram reels, with Instagram reaching the 2 billion user mark. This gives us added confidence in the potential of Instagram Reels in rising to compete against TikTok and drive user growth for Meta.

• We keep to our view that Meta’s moat in digital advertising cannot be so easily overthrown and that headwinds from the rising competition and Apple privacy changes will be overcome.

• Trading at 14X PE based on 2023 earnings, as of 11 February 2022, the upside potential of 65% to target price of USD 380 for Meta Platforms (NASDAQ: FB) is attractive.

: Read the full article here
: Meta Platforms (NASDAQ: FB)