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Meta Platforms: You Have To Trust Zuckerberg, Or Else It's Better To Leave

Aug. 01, 2022 5:41 AM ETMeta Platforms, Inc. (META)BDNCE24 Comments


  • Meta's Q2 earnings disappointed the Street and the market. Yet, META held its June lows, indicating that buying support remains robust at the current levels.
  • Meta is navigating several multi-year projects that would define the longevity of its competitive advantages. However, the ad industry downturn and macro weakness have worsened sentiments.
  • Meta investors need to ask themselves whether they believe Mark Zuckerberg & team can continue to execute well against TikTok and Apple.
  • If not, they should consider exiting now and rotating, given the tech bear market. If they do, they should consider adding at the current levels.
  • We reiterate our Buy rating. We believe the worst should be over for META, given its valuation.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Facebook Changes Its Name To "Meta"

Leon Neal


Meta Platforms' (NASDAQ:META) recent Q2 card was digested by the market as the headwinds from worsening macros, reels' monetization, and Apple's (AAPL) IDFA changes continue to affect its near-term operating results.

So, we believe investors' critical question is whether

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This article was written by

JR Research profile picture

JR Research is a seasoned investor with a background in economics. He focuses on identifying growth companies, market trends and growth opportunities. His approach combines price action with fundamentals.

He runs the investing group Ultimate Growth Investing, which specializes in identifying high-potential opportunities across various sectors. The group is designed for aggressive investors seeking to capitalize on high-growth opportunities, and investors looking for growth opportunities at a reasonable price. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of META, AMZN, GOOGL, MSFT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (24)

ds1986 profile picture
I think we have to trust MZ will be rational in assessing the success or failure of reality labs..

Meta is releasing a headset that could add tens of billions to the top line over its lifecycle in Q4.. but if that product is a flop MZ has to dial back reality labs in a big way!
lorddarley profile picture
Most everyone I know spends more time on that dying and obsolete platform than anywhere else on the internet. Tik Tok is nowhere near as robust, and seems more likely to lose out in the long term.
META old businesses are going down. They copied all their new features from Snap & TikTok. They have to find a new business which is metaverse. Unfortunately, metaverse is not ready yet. Either the graphic quality is bad like in the 80s or you have to spend too much money to buy the top line. META might be successful but it will take many years. Meanwhile, other tech give better return now.
ghrelin profile picture
If you really think about it the single person in history that's truly attributed to the rise of the internet is Mark Zuckerberg. How many hours a day do you use Google's search engine really? How many hours a day did people use facebook when it first came out making silicon valley flock to create more companies that can keep people online??? I don't like him as a person, but nobody would've spent more than 20minutes online at the library had zuckerberg not created facebook. Innovators like him are always looking for the next big market to create. If the metaverse DOES end up becoming big like the internet, do you really think Zuckerberg's company won't be a major player in it? and do you really think tiktok, apple, and/or amazon will REALLY grow their ad businesses enough to make people get off instagram, facebook, and whatsapp permanently? exactly
Reading is never enough profile picture
I trust Zuckerberg.
Long META.
Trust. Whatever…..
lester98 profile picture
Great company, but what's not being talked about is competition for Amazon (soaring on-line ad sales) and Apple. These will likely be very strong new competitors. Think about the ad-targeting capabilities of Amazon, people type right in what they are interested in purchasing!
Without Metaverse, Meta will go the MySpace and Orkut way. Meta does not have a choice but to build its own advertising platform. The good news is Meta does not need any debt to do Metaverse spending.
Murad Shawar profile picture
@Mohit7269 Withought metaverse META will still be fine and eventually recover back to 380$ its 200$ on sale and trading at valuations cheaper then KO/PEP
@Murad Shawar Not for long though. Today Meta does not have any moat. Meta only has a couple of top rated software in a borrowed ecosystem from AAPL, GOOG and MSFT. To have an indestructible moat, they need to build their own ecosystem. The funny thing is these same companies are already neck deep into metaverse without even calling it out. Its just that they are not in such dire straits as Meta is. For Meta, Metaverse is an existential opportunity or threat.
ghrelin profile picture
@Mohit7269 yeah because everyone will uninstall instagram, facebook, and whatsapp...meta ONLY owns 30% of all digital advertising. It copied snap's 'stories' and snap went under. it's gonna copy tiktok and it has the resources tiktok doesnt. aapl and amzn aren't going to give up tons of CAPEX to catch up to META's advertising moat. they're great companies because they know how to stay in their lanes.
Frank Thomas in Florida profile picture
At what point will Facebook pull the plug on the Metaverse experiment? Losses on Metaverse are probably approaching the $100 billion mark. When, if ever, will Facebook pull the plug on this dumb idea called “Metaverse?”
ghrelin profile picture
Just the Millionaire next door profile picture
@Frank Thomas in Florida By your logic Google should pull the plug on the Cloud since they are losing billions.
@Frank Thomas in Florida (IMHO) we will all be astounded in 5 years how pervasive and intertwined VR/AR has become (and we will all say in hindsight that it was an obvious, logical progression). We have just only scratched the surface of the potential use cases for VR.
Trust Zuckerberg or leave?? That’s an easy decision 🤣🤣🤣🤣
They have great ceo and I think that’s why the stock is not a double digit stock. Meta needs to make a move and buy Roblox which is established platform to lock in gen Z and younger generation.
On one hand,you say META not compete effectively; on the other hand,you tell reader to buy it. Do you lose money on META holding?
@tudou! 5 years negative return can’t get over $160 not a growth stock any more
@jimrabbit If META is no longer a growth stock, seems to me it has not become value stock either. One should either wait to see META become a growth stock again, or wait it to become a value stock, which means PE need come down to around 7.
ghrelin profile picture
@jimrabbit amzn had one quarter of negative earnings this year too...is it not a growth stock? growth isn't in terms of stock appreciation, it's in terms of fwd revenue. compare meta's 5yr profit margins to any faang stock and their 5yr avg revenue....
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