Contents
Is Facebook a Good Stock For 2022?
Is Facebook a good stock for 2022? Let’s look at the company’s future ROEs, expenses, and capital expenditures. What do these numbers mean for Facebook shareholders? What are the reasons why this stock is a sound investment? Let’s also look at what’s happening in Meta Platforms. How can we compare it to Facebook’s growth prospects? Are Facebook’s recent earnings more impressive than those of Meta?
Meta Platforms
The share price of Meta Platforms has sunk more than 50% since September. Its quarterly revenue and top-line growth missed Wall Street expectations for the first time in years. The company missed its analysts’ estimates of daily and monthly Facebook users. However, the company’s earnings beat expectations, although profits were down 21% YoY. The stock remains attractive for investors, however. However, it should be noted that it faces stiff competition from rivals such as Facebook and TikTok.
The recent rebranding of Facebook’s parent company to Meta Platforms has raised some questions. The company’s rebranding emphasizes its focus on the metaverse. However, the rebranding follows Facebook’s own move to focus on the “metaverse.” In other words, Facebook’s latest decision to rebrand its social media operations as a part of its “metaverse” strategy will likely result in a dip in Meta’s stock price.
If you are wondering if Facebook is a good stock for 2022, you’ve come to the right place. The company’s forecasts show that the social media giant will continue to dominate the market over the next few years. With its robust user base, Facebook will see significant revenue growth in the coming years. Here’s why investing in FB stock is a smart move. Listed below are some of the reasons why Facebook is a good stock for 2022.
FCF margins: Despite the massive growth in FB’s revenues, the company is still undervalued when compared to its peers. The company reported earnings last week that beat expectations, although revenue was disappointing. If it continues to grow at a similar pace, it could generate more than $148 billion in revenue by 2023. At 20x FCF, the stock could be worth $981 billion. The FCF yield metric equals 5%.
Meta’s future ROEs
While the company isn’t releasing financial results for its hardware division, it is investing heavily in the metaverse. The metaverse aims to be the next big thing in social networking, and its revenue has increased 195% compared to the prior year. Still, Meta’s revenues represent less than 3% of Facebook’s total revenue, which is dominated by advertising. As such, investors should be wary of Meta’s future ROEs.
Investors should take note of Meta’s concerns regarding growth, as the company believes that competitive services are hampering its growth. Meta specifically mentioned the threat of TikTok, which has become a household name among young people. As such, Meta has been trying to up its game to stay relevant among younger users, and is focusing more on driving engagement with its short-form video feature, Reels. The short-form video feature currently has few ads.
Facebook’s expenses and capital expenditures
In the wake of its massive acquisition of Instagram, Facebook is planning to double its capital spending next year. The social network plans to increase investments in artificial intelligence and infrastructure, as well as boost its ad performance. Facebook anticipates spending $29 billion to $34 billion on capital projects in 2022, up from $19 billion this year. The company’s forecast was well above FactSet’s consensus of $23.3 billion.
The social network is also benefiting from its dominance in a time of intense change in the marketplace, including seasonal spending increases and supply chain disruptions. The impact of these changes may be difficult to pin down and major brands will be hesitant to make significant budget shifts to Facebook. In addition to predicting changes in Facebook’s expenses, Insider Intelligence also offers free webinars and content on its website.
Meta’s valuation
While Meta’s forecast for revenue growth in 2022 remains low, the company’s first-quarter results did show some positive changes. During the quarter, the company generated $117.9 billion in revenue, representing a 37% year-over-year increase. The company also reported that its R&D and S&M costs increased by 34% and 21%, respectively. The company’s revenue growth rate was higher than its cost growth, on a standalone and full-year basis, allowing investors to assess the value of Facebook.
The company’s outlook for FY 2022 suggests that the company’s revenue growth will slow, but it is still expected to reach $27 billion to $30 billion. The company’s guidance highlighted the factors that might slow top-line growth in the current quarter. This could be a sign of a broader slowdown in the company’s business. In addition, the company’s outlook for future growth is based on a 2022 forecast that includes both revenue and profit.
Meta’s influence on the 2016 US election
The recent US Election has focused the spotlight on coordinated misinformation networks. Meta has been actively combating this issue and has shared insights into its methods. These methods are both automated and user-reported and broaden the net to catch more groups. We’ve provided a detailed overview of what groups Meta has identified. Hopefully this will be helpful in preventing future misinformation initiatives. However, it is important to note that some groups are still operating outside of the scope of Meta.
In recent years, the core election team of Meta has significantly shrunk, and the CEO no longer meets with the members on a regular basis. This could have a negative impact on the enforcement of election security. The metaverse has huge potential to connect the world, but it can also help facilitate money laundering, large scams, and tax evasion. Failure to see these gaps could have disastrous consequences. While Zuckerberg has publicly stated that he wants Meta to be a company that operates in the metaverse, the company’s election security efforts are becoming less focused on the 2016 election.
