META- Undervalued & Oversold.
Updated
Market Cap - 426 Billion
META has been on a 9 year bull run, in that period, it has firmly cemented itself as a digital marketing juggernaut.
When it reached its all time high of $384.33 back in September 2021, it had an enormous market cap of 1.064 trillion dollars.
At the time, it was only the fifth U.S. company to hit the milestone , joining Apple , Microsoft , Amazon and Google-parent company Alphabet .
However the last 12 months have been somewhat brutal for Zuckerberg & co, the share price has dropped a staggering 60% to date,
making this the biggest correction Meta has ever endured.
Economic uncertainty, regulatory pressure and more recently, a first ever earnings miss, investors were quick to hit the panic button & add to the selling pressure.
In February, Meta went down in history for the biggest one-day crash in the stock market. The company’s stock lost about $230 billion in market value in a single day.
Meta revenue slipped to $28.8 billion in the second quarter, missing the $28.9 billion analyst estimate. Gross profit was $23.6 billion, down 0.5% from the equivalent quarter last year.
In April, Apple introduced a change to its privacy policy that requires apps to ask users if they want to be tracked, this made META's ad selling business less affective, with only a reported 16% of users agreeing to be tracked.
The privacy crackdown is set to cost Meta at least $10 billion in lost sales in 2022 alone.
As a result of the data drought, Meta shifted their ad spending to Google because its flagship search-ad business relies on customer intent—users’ search terms immediately reveal what they are interested in—rather than data collected from app and web tracking.
Google , the world’s largest digital-ad company by revenue, generated its highest sales growth in more than a decade in the third quarter.
The sensational rise of short-video sharing app TikTok, has seen many users defect with approximately 1.4 billion monthly active users now on the popular platform.
This is quickly approaching Instagram, which has approximately 2 billion monthly active users.
This year, TikTok is on track to triple worldwide ad revenues, to 11.6bn, more than the 10.44bn for Snapchat and Twitter combined.
This forced META to focus more on short-videos in the form of "Reels". Reels recently reached $1 billion in annualized revenue for the first time, Reels now has a higher revenue run rate than Facebook /Instagram Stories at identical times post-launch.
Mark Zuckerberg is betting his company’s future on the metaverse — a virtual space in which people interact with each other using avatars and developing AR / VR technology.
He said that he plans to invest heavily in his company’s metaverse ambitions & that will mean losing significant amounts of money on the project in the next three to five years.
This massive shift has shaken up already nervous investors, however should one of its Reality Labs products change the world, it would be the jolt this company needs to continue funding its ambitions.
The company once suffered a colossal 19% drop in 2018 after posting disappointing revenue and user figures for the second quarter of that year, however it bounced back before going on to make all time highs.
Facebook has 2.74 billion monthly active users, No other platform offers this kind of reach.
Facebook is the world’s third-most visited website- outranked only by Google and YouTube. It’s also the top Google search query.
Facebook is the second-most downloaded free app in the App Store.
63% of the U.S. population over age 12 uses Facebook .
32.4% of Facebook’s audience is aged 25-34.
Seniors are the fastest-growing group of Facebook users. More than 37% of people born in 1945 or earlier are on Facebook , up from 26% a year earlier.
74% of high-income earners use Facebook For those earning $75,000 or more, Facebook is the preferred social network.
Facebook is also the most popular social network (besides YouTube) for college graduates, with 74% of them using the platform. LinkedIn again comes second with this group, at 51%.
Facebook users spend 34 minutes per day using the platform.
36% of people get news from Facebook .
79.9% of Facebook users only access the platform on a mobile device.
An average Facebook user clicks on 12 ads per month.
Facebook has an advertising audience of 2.14 billion.
Meta's balance sheet includes $40 billion in cash, equivalents and short term investments, with $16 billion in total debt (although some of this may include operating liabilities).
The firm's free cash flow generation is very strong, with $8.5 billion generated in the quarter, up 8.9% year over year.
$5 billion worth of stock was approved for purchase in the second quarter. In addition, the company authorized another $24.32 billion for stock repurchases.
Meta further reduced its full-year operating expense during its latest earnings update. Its current operating expense guidance sits at $85.0-$87.0 billion for 2022
From a TA point of view, there are a number of reasons to be bullish which include-
- A very strong oversold signal (not shown due to limitations using invite-only scripts on public ideas)
- 9 + 5 oscillators recently printing divergence -look left,
- RSI / MFI / Stochastic are all oversold & sit @ record lows,
- Pulling a fib from the 2018 lows, we could see that price currently sits @ the 0.786 Fibonacci level,
- Decreasing selling volume,
- Support trendline being tested.
Should the 0.786 / support trendline not hold, long-term bulls should look for buys @ 2018/2020 lows.
Can price drop further? Sure! Timing tops or bottoms is not my thing.
Will Zuckerberg's metaverse gamble pay off? Only time will tell.
As it stands, Meta remains in a strong position with enormous reach, should the massive investment in metaverse pay off, there is no doubt that Meta will go on to make new highs.
Speculative Setup, DYOR. Strictly a long term play. Allow 24-72 Months for this idea.
META has been on a 9 year bull run, in that period, it has firmly cemented itself as a digital marketing juggernaut.
When it reached its all time high of $384.33 back in September 2021, it had an enormous market cap of 1.064 trillion dollars.
At the time, it was only the fifth U.S. company to hit the milestone , joining Apple , Microsoft , Amazon and Google-parent company Alphabet .
However the last 12 months have been somewhat brutal for Zuckerberg & co, the share price has dropped a staggering 60% to date,
making this the biggest correction Meta has ever endured.
Economic uncertainty, regulatory pressure and more recently, a first ever earnings miss, investors were quick to hit the panic button & add to the selling pressure.
In February, Meta went down in history for the biggest one-day crash in the stock market. The company’s stock lost about $230 billion in market value in a single day.
Meta revenue slipped to $28.8 billion in the second quarter, missing the $28.9 billion analyst estimate. Gross profit was $23.6 billion, down 0.5% from the equivalent quarter last year.
In April, Apple introduced a change to its privacy policy that requires apps to ask users if they want to be tracked, this made META's ad selling business less affective, with only a reported 16% of users agreeing to be tracked.
The privacy crackdown is set to cost Meta at least $10 billion in lost sales in 2022 alone.
As a result of the data drought, Meta shifted their ad spending to Google because its flagship search-ad business relies on customer intent—users’ search terms immediately reveal what they are interested in—rather than data collected from app and web tracking.
Google , the world’s largest digital-ad company by revenue, generated its highest sales growth in more than a decade in the third quarter.
The sensational rise of short-video sharing app TikTok, has seen many users defect with approximately 1.4 billion monthly active users now on the popular platform.
This is quickly approaching Instagram, which has approximately 2 billion monthly active users.
This year, TikTok is on track to triple worldwide ad revenues, to 11.6bn, more than the 10.44bn for Snapchat and Twitter combined.
This forced META to focus more on short-videos in the form of "Reels". Reels recently reached $1 billion in annualized revenue for the first time, Reels now has a higher revenue run rate than Facebook /Instagram Stories at identical times post-launch.
Mark Zuckerberg is betting his company’s future on the metaverse — a virtual space in which people interact with each other using avatars and developing AR / VR technology.
He said that he plans to invest heavily in his company’s metaverse ambitions & that will mean losing significant amounts of money on the project in the next three to five years.
This massive shift has shaken up already nervous investors, however should one of its Reality Labs products change the world, it would be the jolt this company needs to continue funding its ambitions.
The company once suffered a colossal 19% drop in 2018 after posting disappointing revenue and user figures for the second quarter of that year, however it bounced back before going on to make all time highs.
Facebook has 2.74 billion monthly active users, No other platform offers this kind of reach.
Facebook is the world’s third-most visited website- outranked only by Google and YouTube. It’s also the top Google search query.
Facebook is the second-most downloaded free app in the App Store.
63% of the U.S. population over age 12 uses Facebook .
32.4% of Facebook’s audience is aged 25-34.
Seniors are the fastest-growing group of Facebook users. More than 37% of people born in 1945 or earlier are on Facebook , up from 26% a year earlier.
74% of high-income earners use Facebook For those earning $75,000 or more, Facebook is the preferred social network.
Facebook is also the most popular social network (besides YouTube) for college graduates, with 74% of them using the platform. LinkedIn again comes second with this group, at 51%.
Facebook users spend 34 minutes per day using the platform.
36% of people get news from Facebook .
79.9% of Facebook users only access the platform on a mobile device.
An average Facebook user clicks on 12 ads per month.
Facebook has an advertising audience of 2.14 billion.
Meta's balance sheet includes $40 billion in cash, equivalents and short term investments, with $16 billion in total debt (although some of this may include operating liabilities).
The firm's free cash flow generation is very strong, with $8.5 billion generated in the quarter, up 8.9% year over year.
$5 billion worth of stock was approved for purchase in the second quarter. In addition, the company authorized another $24.32 billion for stock repurchases.
Meta further reduced its full-year operating expense during its latest earnings update. Its current operating expense guidance sits at $85.0-$87.0 billion for 2022
From a TA point of view, there are a number of reasons to be bullish which include-
- A very strong oversold signal (not shown due to limitations using invite-only scripts on public ideas)
- 9 + 5 oscillators recently printing divergence -look left,
- RSI / MFI / Stochastic are all oversold & sit @ record lows,
- Pulling a fib from the 2018 lows, we could see that price currently sits @ the 0.786 Fibonacci level,
- Decreasing selling volume,
- Support trendline being tested.
Should the 0.786 / support trendline not hold, long-term bulls should look for buys @ 2018/2020 lows.
Can price drop further? Sure! Timing tops or bottoms is not my thing.
Will Zuckerberg's metaverse gamble pay off? Only time will tell.
As it stands, Meta remains in a strong position with enormous reach, should the massive investment in metaverse pay off, there is no doubt that Meta will go on to make new highs.
Speculative Setup, DYOR. Strictly a long term play. Allow 24-72 Months for this idea.
Note
"there is no doubt that Meta will go on to make new highs"And a new All time high was most certainly made.
Price did fall below our 2018/2020 buy zone by approximately %28, but the bulls staged a sensational rally with a 452% move to the upside.
Congratulations to those who took this trade!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.