Where Will Meta Platforms Stock Be In 5 Years? NASDAQ:META

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Microsoft. The digital advertising sector as a whole has seen growth slow because of a broader pullback in demand over concerns about a recession, so Alphabet’s results could harken a recovery for the overall industry. Over the years, Facebook acquired a large number of apps and other businesses that include but are not limited to Instagram and WhatsApp. The company changed its name to Meta Platforms DBA Meta in 2021 to reflect its business and mission better.

Before that, Meta had reported three straight quarters of sales declines, underscoring the social media company’s challenges coping with a slowdown in digital ads. Investing in companies with low financial strength could result in permanent capital loss. Hence, it’s crucial to thoroughly review a company’s financial strength before purchasing shares. Meta Bull bear power Platforms has a cash-to-debt ratio of 1.48, ranking worse than 70.61% of 558 companies in the Interactive Media industry. Despite this, GuruFocus ranks Meta Platforms’ financial strength as 8 out of 10, suggesting a strong balance sheet. The only caveat is that investors should monitor cash burn to ensure that losses remain at an acceptable level.

The social media giant has been battered, but it could make a sizzling comeback.

If the stock price is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher. Reality Labs segment revenue grew to $877 million, a 22% year-over-year increase, but lost $3.3 billion; the division is receiving heavy investments and probably won’t be profitable for a while. Expenses increased due to higher R&D spending, which Mark Zuckerberg made clear was coming when he announced the company’s name change to Meta.

• Although Meta has attracted high-quality content creators in the last few years, YouTube easily dominates this category.
• The market’s reaction doesn’t seem to think so, but things might not be what they seem.
• First, Meta faces a tough comparison against its 48% growth in the first quarter of 2021.
• The company quickly grew and expanded into other universities and then opened itself to the public in 2006.
• 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.

Meta’s latest results give investors hope that the worst is over, thanks to the solid improvements on the top and the bottom line. While it’s probably still in the early days of recovery, Meta’s advertising business has likely reached the bottom of the cycle it’s in. And management offered guidance suggesting total revenue will be $32 billion to $34.5 billion in the current quarter. If anything, we can see that it has doubled down on its investments, resulting in a 33% increase in its operating losses. Like it or not, investors can only be hopeful that the metaverse project will succeed in the long run.

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The drop in Meta’s share price has wiped billions of dollars off its market value and this trend is expected to continue as investors worry about the company’s deteriorating fundamentals. The company missed top and bottom line expectations, however, reported a slight improvement in daily active user growth. The company recorded 3%+ YoY constant-currency revenue growth and Facebook DAUs came to 1.97 billion, an increase of 3% year-over-year. Meta Platforms revealed at its Q earnings call that on a user geography basis, year-over-year ad revenue growth was strongest in Asia-Pacific and the Rest of the World at 13% and 11%, respectively.

“The $40 billion increase in the share repurchase authorization provides additional EPS support,” Thill said. “While the reduction in the expense guide was expected, the magnitude of the change was a positive surprise,” Jefferies analyst and Meta bull Brent Thill wrote in a client note. The company then went onto slash its expense and capex guidance for the year by $5 billion and $4 billion, respectively. Shares of Meta Platforms (META 1.27%) were climbing today in response to better-than-expected numbers from big tech peers Alphabet (GOOG -0.07%) (GOOGL 0.08%) and Microsoft (MSFT 1.49%) last night.

After losing half its market valuation, the social media giant is showing signs of life once again.

Meta is expected to be transparent about how it intends to deliver targeted advertisements but overall, the company can still continue to grow even amid this challenging macro environment. Investors need to look out for Meta’s planned investments in metaverse technology. Ramping up investments to achieve ambitious metaverse goals has not gone down well with investors so far but it seems like the company is not prepared to slow down either. If Meta fails to show positive returns from these investments within the next 5 years, META stock is likely to take a big hit. Hardware sales of AR and VR headsets will give an early indication of Meta’s success as a metaverse company as immersive experiences become more common in content consumption, particularly gaming.

However, the social media space is changing dramatically and in five years, Meta plans to evolve from a social media behemoth to a growing company exploring different facets of the Internet. Meta’s ambitions are currently supported by Horizon, a platform that allows users to create and personalize their avatars. In early 2022, Meta revealed that it already had around 300,000 monthly users.

META stock price prediction: Analyst sentiment

“Multi-year AI driven platform retention could help multiple expansion, as terminal value uncertainty has weighed on valuation.” This is above the $27.66 billion that analysts were looking for this quarter. It’s also a 3% increase compared to the $27.91 billion reported in Q1 2022. Moderate success in AI, with Reels, and even with its metaverse efforts could help the company hit the high-end of analyst earnings forecasts for the next two years. The latest in its rivalry with TikTok may also signal a growth resurgence for Meta’s flagship platforms. The rollout of the Reels feature on Facebook and Instagram has already resulted in increased engagement.

According to market research firm eMarketer, advertisers spent nearly $492 billion on digital ads last year. This means that Meta’s share of the digital ad market stood at just over 23% as the company had generated $115 billion in ad revenue in 2021. The research company forecasts that digital ad spending could increase to $785 billion by 2025. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.

Despite growing criticism, Facebook remains the world’s most popular social media platform, and WhatsApp is the world’s favorite Instant Messaging app. In the long run, Meta’s user growth is likely to rebound as Reels is slowly becoming a mini-YouTube, allowing creators to earn additional income. Furthermore, content personalization and infinite streams will also https://investmentsanalysis.info/ drive user growth. The next few years will be more about Meta’s transition and less about growth, which is something investors need to be aware of. Investing in Meta stock today in the hopes of short-term gains, therefore, seems a risky bet. So, Meta Platforms can easily exceed $1 trillion in market capitalization by 2030 and become worth much more than that.

Businesses have slashed their advertising budgets due to soaring inflation, recessionary fears, and the Ukraine conflict. Furthermore, Apple’s policy changes have made it much more difficult to run targeted advertisements. However, Meta remains an important platform for advertisers, accounting for more than half of all digital marketing revenue. With a large user base across its platforms, Meta can still offer tailored ads without tracking user behavior.

Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers. Investors should closely monitor Meta’s progress in its Reels segment because currently, Reels monetizes at a slower rate than news feed and stories. According to management, this is because Reels currently show fewer ads than news feed and stories, meaning less revenue is being generated from the segment as of today. Management cited the company’s ability to make successful transitions in the past, namely Meta’s previous shifts from web to mobile and feed to stories.