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2022-02-12
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Could Meta Platforms Stock Double Over the Next 12 Months?
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The stock is down about 30% so far in 2022. Most of this decline, of course, was caused by the company's disappointing third-quarter update and management's dismal guidance for Q1.</p><p>The question on many investors' minds is whether this pullback in the tech-stock price represents a buying opportunity. At least one analyst thinks this is not just a buying opportunity -- but a <i>compelling</i> one. On Wednesday, Tigress Financial analyst Ivan Feinseth called the stock a "strong buy," reiterating a $466 12-month price target.</p><p>Given where Meta Platforms stock is trading as of this writing, this represents just over 100% upside for shares. Is this analyst onto something?</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c1a3029769a20941e96ddc71b5548019\" tg-width=\"2000\" tg-height=\"1333\" width=\"100%\" height=\"auto\"/><span>IMAGE SOURCE: GETTY IMAGES.</span></p><p><b>Meta Platforms has a history of conservative guidance</b></p><p>The main thing that spooked investors when Meta Platforms reported its fourth-quarter results was CFO David Wehner's guidance for revenue to grow just 3%-11% year over year in Q1. This would mark a big slowdown from the company's 20% revenue growth in Q4. Further, management said in Meta Platforms' fourth-quarter earnings call that it's a "multiyear development journey" for the company to rebuild its advertising measurement and targeting systems to fully address new challenges presented on these fronts by <b>Apple</b>'s recent iOS updates.</p><p>But investors should note that Wehner has a long history of being overly conservative. Consider Wehner's repeated calls in 2017 for advertising-revenue growth to "come down meaningfully" in the second half of the year, relative to the 50% growth levels it was averaging previously. Yet revenue increased 49% year over year in both the third and fourth quarter of 2017. This compared to 51% and 47% respective growth in advertising revenue in the first and second quarters of 2017.</p><p>While past results are certainly no indication of future results, it's a fair statement to say that Meta's guidance typically errs on the side of conservatism.</p><p>The fact that Meta may be guiding conservatively is one reason Feinseth is likely reiterating a buy rating for the stock after its post-earnings crash. The Street's sell-off of an already attractively valued stock may have just created an outstanding buying opportunity for investors willing to see through to the other side of this storm.</p><p><b>A compelling valuation</b></p><p>Today, Meta has a price-to-earnings ratio of just 17. For a company as profitable as Facebook and with a bigger network effect than any other social network in the world, this valuation is compelling. A buying opportunity in a market leader like this may not last.</p><p>Sure, investors should keep an eye on how growth fares in the coming quarters. If revenue in Q1 really does grow 11% or less year over year, and if quarterly guidance is bleak once again, this may be cause for concern. But it may be worth starting a position in the stock at this lower valuation, as the cheap valuation arguably prices in a lot of the risks for the company.</p><p>While a doubling of the stock in just 12 months is unlikely, it's certainly possible. Even if the company's earnings per share don't grow over the next 12 months (an unlikely outcome), all that would need to happen for the stock to double is a price-to-earnings multiple expansion from 17 to 34. If Meta proves that current headwinds are only temporary, an outcome like this isn't out of the question.</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Could Meta Platforms Stock Double Over the Next 12 Months?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCould Meta Platforms Stock Double Over the Next 12 Months?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-02-11 09:42 GMT+8 <a href=https://www.fool.com/investing/2022/02/10/could-meta-platforms-stock-double-over-the-next-12/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Key PointsThis analyst has a $466 price target on Meta Platforms stock.The stock's post-earnings sell-off may be overdone.Meta Platforms stock now has a price-to-earnings ratio of just 17.Shares of ...</p>\n\n<a href=\"https://www.fool.com/investing/2022/02/10/could-meta-platforms-stock-double-over-the-next-12/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2022/02/10/could-meta-platforms-stock-double-over-the-next-12/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1113677136","content_text":"Key PointsThis analyst has a $466 price target on Meta Platforms stock.The stock's post-earnings sell-off may be overdone.Meta Platforms stock now has a price-to-earnings ratio of just 17.Shares of Facebook-parent Meta Platforms(NASDAQ:FB) have been absolutely clobbered this year. The stock is down about 30% so far in 2022. Most of this decline, of course, was caused by the company's disappointing third-quarter update and management's dismal guidance for Q1.The question on many investors' minds is whether this pullback in the tech-stock price represents a buying opportunity. At least one analyst thinks this is not just a buying opportunity -- but a compelling one. On Wednesday, Tigress Financial analyst Ivan Feinseth called the stock a \"strong buy,\" reiterating a $466 12-month price target.Given where Meta Platforms stock is trading as of this writing, this represents just over 100% upside for shares. Is this analyst onto something?IMAGE SOURCE: GETTY IMAGES.Meta Platforms has a history of conservative guidanceThe main thing that spooked investors when Meta Platforms reported its fourth-quarter results was CFO David Wehner's guidance for revenue to grow just 3%-11% year over year in Q1. This would mark a big slowdown from the company's 20% revenue growth in Q4. Further, management said in Meta Platforms' fourth-quarter earnings call that it's a \"multiyear development journey\" for the company to rebuild its advertising measurement and targeting systems to fully address new challenges presented on these fronts by Apple's recent iOS updates.But investors should note that Wehner has a long history of being overly conservative. Consider Wehner's repeated calls in 2017 for advertising-revenue growth to \"come down meaningfully\" in the second half of the year, relative to the 50% growth levels it was averaging previously. Yet revenue increased 49% year over year in both the third and fourth quarter of 2017. This compared to 51% and 47% respective growth in advertising revenue in the first and second quarters of 2017.While past results are certainly no indication of future results, it's a fair statement to say that Meta's guidance typically errs on the side of conservatism.The fact that Meta may be guiding conservatively is one reason Feinseth is likely reiterating a buy rating for the stock after its post-earnings crash. The Street's sell-off of an already attractively valued stock may have just created an outstanding buying opportunity for investors willing to see through to the other side of this storm.A compelling valuationToday, Meta has a price-to-earnings ratio of just 17. For a company as profitable as Facebook and with a bigger network effect than any other social network in the world, this valuation is compelling. A buying opportunity in a market leader like this may not last.Sure, investors should keep an eye on how growth fares in the coming quarters. If revenue in Q1 really does grow 11% or less year over year, and if quarterly guidance is bleak once again, this may be cause for concern. But it may be worth starting a position in the stock at this lower valuation, as the cheap valuation arguably prices in a lot of the risks for the company.While a doubling of the stock in just 12 months is unlikely, it's certainly possible. Even if the company's earnings per share don't grow over the next 12 months (an unlikely outcome), all that would need to happen for the stock to double is a price-to-earnings multiple expansion from 17 to 34. 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