Facebook Parent Meta Dodges Rate Tantrum That’s Roiling Tech Stocks
Facebook Parent Meta Dodges Rate Tantrum That’s Roiling Tech Stocks
(Bloomberg) -- Facebook-parent Meta Platforms Inc. has been relatively unscathed in this week’s technology selloff that’s zapped about $700 billion in market value from the Nasdaq 100 Stock Index.
The stock is down a little over 1% since the start of the year while other megacaps, like Google parent Alphabet Inc. and Microsoft Corp., suffered their worst weeks since the early days of Covid-19 pandemic amid surging Treasury yields. Meta shares were up as much as 1.4% on Friday before closing down 0.2%.
The resilience is a turnabout of sorts for Meta, whose shares have been under pressure for months amid renewed scrutiny of its social-media properties. A slump of 13% from its September peak has left the stock the cheapest of the so-called Faamg cohort that also includes Amazon.com Inc. and Apple Inc., based on profits expected over the next 12 months. At 22 times future earnings, Meta is priced at a discount of about 20% to the average in the Nasdaq 100, according to data compiled by Bloomberg.
Facebook is projected to see the fastest revenue growth among Faamg stocks in 2022 with an expansion of 19%, according to data compiled by Bloomberg. Those estimates are likely underestimating the company’s revenue growth potential if a revamped Instagram newsfeed that’s being tested is widely deployed and gains traction, according to UBS.
“Drawing from a wider content base could unlock a meaningful lift in engagement, reminiscent to TikTok,” analyst Lloyd Walmsley wrote in a research note on Thursday, raising his price target on the stock to $440 from $425.
The average price target on Wall Street for Meta shares is $400, which implies a potential gain of about 20%, according to data compiled by Bloomberg.
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