After being pressured by a series of negative developments in 2021, Meta Platforms (NASDAQ:) now offers an attractive risk-return proposition to investors in early 2022. returns in the second half of last year, looks attractive compared to its peer group of five mega-cap tech giants, including Apple (NASDAQ:), Amazon (NASDAQ:), Netflix (NASDAQ:), and Alphabet (NASDAQ: ).
Even after the December rally, Meta shares remained 10% below their September peak, a period of intense scrutiny after whistleblower testimony dampened content strategy and some of the its products. As a result, Facebook was accused of prioritizing profits over user safety and security in order to counter a years-long decline in growth metrics for key user groups, such as teens and young adults. rose 24% for the full year, posting the third highest profit of the group known as FAANG's.
Perhaps the biggest setback to FB in 2021 came in October when the Menlo Park, California-based company missed expectations and reported a revenue outlook below the consensus for the fourth quarter, warning of the impact of the new Apple's privacy policy, which provides users with a tool to prevent social media apps from tracking their personal activities over the Internet. Meta's $1 trillion valuation and its place among the five most valuable American companies. Despite the number and severity of the negative developments in 2021, some statistics show that these risks are already in the e share price. The lagging P/E ratio is now below 24, approaching its lowest multiple since March 2020 when it briefly plunged below 23. This was at the height of the COVID crisis and also coincided with a major low in FB stock. The company's valuation, along with projected continued growth — expected at a double-digit pace for the coming quarters — is bringing investors back. Analysts also remain optimistic about the stock. In an Investing.com survey of 54 analysts, 45 rated the stock as "outperforming."
Chart: Investing.com
The median price target among those surveyed was $396.46, up 17% from Monday's closing price of $338.54.
Source: InvestingPro
Also, based on InvestingPro analysis, the fair value of FB is $420.56, which represents upside potential of 24%. aim to transform the social media giant into a virtual reality platform. He says he's building out the metaverse — an immersive digital environment accessible using virtual and augmented reality tools — by investing in VR and AR-powered products. These initiatives, according to Zuckerberg, will form the basis for the next. important platform for human communication, and one that he believes Facebook has a major competitive advantage. Goldman Sachs, which has a $445 price target on Meta Platforms, believes the time is right to invest in the stock. In a recent note, his analysts said:
"We expect Meta to be a long-term secular winner on the metaverse and see that they are well positioned to take advantage of the next wave of computing."
"Over the past few quarters, Meta Platforms has outlined its long-term vision to position the company for Web 3.0 and the metaverse as the successor to the mobile Internet, including a company name change and a commitment to scale investments against this opportunity. ”
Bottom Line
Facebook stocks have become attractive again, after many setbacks in the past year. The company's dominance in the digital advertising market and its investments in virtual reality tools suggest that long-term investors will be rewarded if they decide to own this name.
