From Nasdaq: 2024-04-29 20:05:00

Meta Platforms (NASDAQ: META) saw a 150% stock return in the last year, reaching a $1 trillion market cap. The advertising business has shown resilience, with revenue growth of 21% and 36% from 2020-2021. Despite challenges in 2022, revenue rebounded in 2023 with 16% growth, demonstrating the company’s stability.

The metaverse division, Reality Labs, incurred operating losses of $13.7 billion in 2022 and $16.1 billion in 2023. Despite potential rewards in the metaverse industry, the uncertainties around mainstream adoption pose risks for Meta’s heavy investments. Investors question whether the venture will pay off and impact the company’s profitability.

Meta’s stock is trading at a P/E ratio of 26, in line with its five-year average. While the stock’s valuation is not overly expensive, the uncertainty around the metaverse investments and ongoing reliance on advertising profits presents a mixed investment thesis. Current investors may hold, but potential investors should proceed with caution given the uncertainties.



Read more at Nasdaq: Is Meta Platforms Stock a Buy?