Why is Meta so Cheap?

We might be more optimistic than Mark.

Andrew Willis 8 July, 2022 | 4:48AM
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Andrew Willis: While Mark Zuckerberg is beginning to scare some of his own employees as he worries about tougher economic times ahead, we might be less concerned about Meta (META) than he seems to be.

It makes sense for the Facebook parent to slash hiring targets in a tight labour market, and make the most of the situation by motivating employees to work harder. But we think that the worse might be over as it seems the stock market’s already reacted to all the negativity and has priced it in. Plus, we don’t believe Meta’s leadership team will lose sight of just how successful its advertising business has been and can still be going forward.

Senior equity analyst Ali Mogharabi sees Meta’s fair value estimate in deep value territory today, with its wide moat of 3.6 billion users that continues to attract advertisers to a variety of platforms. Not to mention, an entire Metaverse-worth of advertising opportunities.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Meta Platforms Inc Class A468.03 USD-0.79Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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