Meta stock is down 56% from its 52-week-high, leaving many investors with the question, is Meta a buy now?
To evaluate if meta stock is a buy now, we will take a look at its current numbers and forecast.
Disclaimer - Nothing in this post is financial advice and only contains our personal opinions
Meta's most recent quarter came in weak as revenue growth was slashed
The operational crisis of social media giant Meta has widened after its latest quarterly figures, reported on the 28th of July.
The company achieved a decline in revenue for the first time in its history. Meta reported total revenue of $28.822 billion compared to $29.077 billion in 2021.
People continue using Facebook, Instagram, and WhatsApp
Despite the decline in revenue, Meta reported its 'Family Daily Active People' keeps growing. With 2.88 billion it grew by 4.5% compared to the second quarter of 2021.
The company's growth in daily active users is a crucial necessity of being able to grow again and could foreshadow that Meta is and will continue to be the number one in social media.
Institutions cut price targets for Meta
After a disappointing quarter, many institutions cut Meta's price target, but surprisingly, the majority of them kept their rating at "Buy"
It seems like institutions admit the recent decline in Meta's performance was caused by the overall economic outlook that created headwinds.
Meta continues to develop
The company is introducing new services and steadily expanding its platforms, Facebook and Instagram, to make them more attractive to young users. In recent months, for example, the company tried several improvements to its AI and introduced "Reels" to Instagram.
Metaverse - the potential multi-billion future
Obviously, after changing the company's name from Facebook to Meta, the company strives to become the leader in the Metaverse.
"We want to get about a billion people in the Metaverse to spend hundreds of dollars to buy things like digital goods, digital content and other things. This could be clothing for the user's avatar, digital goods for the virtual home or decorations for the virtual conference room," CEO Mark Zuckerberg said.
The CEO also said that Meta's VR-Headsets Meta Quest 2 sees higher than expected demand in recent months.
Crypto crashes - Meta continues to expand its NFT service
Meta plans to continue expanding the use of digital collectibles such as non-fungible tokens (NFTs) on its platforms, despite the crypto crash and declining NFT sales.
NFTs are data, stored on a blockchain that are Non-fungible. Bitcoin, for example, is fungible. You can trade one Bitcoin for another one, and you will have the exact same thing in the end. With NFTs, this is not the case since they are unique.
Meta sees the opportunity that the billions of people who are currently using its platform could use NFTs in the future. Millions of artists could create products and sell them on Meta's platforms, which would result in an immense cash flow for the company.
A look at Meta's numbers - compared to its peer group
When looking at the numbers, compared to its peer group, Meta seems to be currently undervalued due to its lower PE Ratio, lower Price/Book value, and greater EPS.
Conclusion - Is Meta stock a buy?
We do think that Meta is currently a buy. Even though revenue has been declining in the most recent quarter.
Meta seems to have a clear plan for its future which makes its current valuation a bargain on the stock market.
Disclaimer - Nothing in this post is financial advice and only contains our personal opinions
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