BUY Meta Platforms (META)
Undoubtedly, the shares of $FB Meta Platforms suffered due to the general bear market. However, the social media company had several significant challenges in 2022 unrelated to the bear market, including increased competition from TikTok, unfavorable revisions to Apple's privacy policies, and a decrease in marketing expenditures.
When all is said and done in 2022, management anticipates CAPEX to increase by about 70% yearly. In addition, Meta will raise CAPEX by another 10% or more, even with the scaled-back projection for 2023. A significant increase in CAPEX as a percentage of revenue is also the result of Meta's rising capital expenditures despite a drop in revenue.
Advertising is possible when users pay a lot of money for a platform. And if Meta is good at anything, it's advertising. Unfortunately, Apple took a while to begin utilizing the iOS advertising opportunity. However, after a rocky beginning, it is currently anticipated to generate over $10 billion in ad revenue across all of its services by the following year.
Given Meta's expertise in advertising, which brings in over $100 billion in ad revenue annually, it might profit from the anticipated increase in metaverse expenditure. Additionally, by owning the platform, it can promote metaverse applications within Facebook and Instagram and has more robust measuring tools in comparison to rivals.
Not surprisingly, Meta claims its family of apps has 2.93 billion daily active users. That represented an increase of 120 million from the prior year and 50 million from the previous quarter. Following the stock's low valuation, the market may have already factored in the obstacles affecting Meta's prospects in the near future. Nevertheless, I expect the company to outperform the market in the next year or two, making META stock a strong buy at current share price levels.
Source: Yahoo Finance