Meta Platforms stock forecast: Are metaverse bets off?
Meta Platforms’ (META) stock performance has seen little respite in the bearish environment so far this year. After a mass sell-off in late October, stock sank 24% to the lowest price since 2016. As of 2 November 2022, stock is changing hands at $92.77.
The stock’s losses have mirrored those of the tech-heavy US Tech 100 (US100) index, with confidence in tech markets having plummeted and Meta’s drastic pivot toward the metaverse having concerned shareholders.
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 8.2% which has prompted a risk-off attitude among market participants.
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.
Meta Platforms stock analysis
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 after 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 in many years, with shares falling more than 26%.
In 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 company’s second-quarter financial results were dismal, with reported revenue of $452m, down from $695m in the first quarter. The company said its guidance reflects the “continuation of the weak advertising demand environment.”
The losses in its Virtual Reality (VR) division hit $2.8bn in the second quarter, even as its virtual reality hardware and software sales continue to grow.
Meta Platforms fundamental analysis: Latest earnings
On 26 October 2022, Meta Platforms reported its financial results covering the third 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.
“Our community continues to grow and I’m pleased with the strong engagement we’re seeing driven by progress on our discovery engine and products like Reels,” said Mark Zuckerberg, founder and CEO of Meta Platforms.
“While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth. We’re approaching 2023 with a focus on prioritisation and efficiency that will help us navigate the current environment and emerge an even stronger company.”
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 2 November 2022, was bullish. Of 50 financial services companies rating the stock, 29 gave it a ‘buy’ rating, 18 ‘hold’ and three suggest a ‘sell’.
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.
Since April 2020, most analysts have lowered their price targets for the firm. One notable 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.
Citibank analyst Ronald Josey, who gave a ‘buy’ rating and a $222 price target for the company, said that ad loads on Reels reached 14% last month, up from 8% in July and 10% in August.
Meanwhile, WallStreetZen stated: “META’s earnings are forecast to grow slower (4.46% per year) than the US Internet Content & Information industry (9.79%)” The forecast ROA is 21.4%, which is lower than the forecast US Internet Content & Information industry average of 27.04%.
Meta Platforms (META) stock forecast: Targets for 2022-2025 and beyond
Algorithm-based forecasting services gave a mixed bullish long-term Meta Platforms stock forecast for 2022 as of 2 November.
WalletInvestor expected the META future stock price to end 2022 at $103.70. Looking forward, it anticipates the stock could move to $101.39 by the end of 2023. The Meta platforms stock forecast for 2025 was $96.54 by the end of the year.
TipRanks offered a bullish META stock forecast, suggesting the stock could rise to an average of $144.72 in 12 months’ time. Out of 36 analysts polled, 23 rated META a buy, 10 a hold, and three recommended a sell.
These predictions have been drafted by algorithms based on an analysis of Meta Platforms’ historical stock price performance, but 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 Meta Platforms stock 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.