Meta Platforms' shares have underperformed most of its FAANG peers, and this is consistent with a decline in Facebook's brand valuation which could possibly be driven by negative news flow. In a nutshell, the stock price performances of technology stocks have been disappointing this year, and META is no exception. A June 17, 2022, Seeking Alpha News article noted that the company is involved in a 'suit claiming a medical data leak to Facebook.' CNET reported on June 8, 2022, that META is 'facing 8 lawsuits that allege its addictive algorithms harm young users.' Also, it was announced at the beginning of this month that Sheryl Sandberg will no longer be Meta Platforms' Chief Operating Officer in a few months. There have been a couple of negative news items for META in just June alone, and this might have affected the company's brand value and stock price performance. This might help to explain why Meta Platforms' shares have dropped to a larger extent year-to-date, as compared to the stock prices of Alphabet, Apple, and Amazon. In contrast, the brand valuations for Google, Apple, and Amazon rose by +79%, +55% and +3%, respectively in 2022. More importantly, Kantar's analysis found that Facebook's brand value decreased by -18% from $227 billion in 2021 to $186 billion this year. Kantar's BrandZ Top 10 Most Valuable Global Brands For 2022 Notably, the Facebook brand's ranking fell from sixth last year to eighth in 2022.

On June 15, 2022, Kantar disclosed its 'BrandZ Top 10 Most Valuable Global Brands' for this year. Interestingly, META's shares have underperformed most of the other FAANG stocks (with the exception of Netflix) in 2022 year-to-date, and this is aligned with the results of a recently released worldwide brand value ranking. Specifically, there are concerns that a larger-than-expected decline in spending on digital advertising in a post-pandemic environment will be a drag on Meta Platforms' future growth. Also, Work-From-Home tailwinds for the technology sector have eased considerably with an increasing number of workers returning back to offices. I will elaborate on META's valuations in a subsequent section of this article. Expectations of higher interest rates have led investors to favor value stocks over growth stocks, with fast-growing technology stocks in general suffering from a significant valuation de-rating. The shares of the other major technology stocks, Amazon ( AMZN), Apple ( AAPL) and Alphabet ( GOOG) ( GOOGL), also pulled back by -36.2%, -25.4%, and -22.8%, respectively in 2022 year-to-date.Ī rising rate environment and the reopening of the economy have been negative for listed technology companies. Year-to-date in 2022, the technology sector has fallen out of favor with investors, and this is seen with the performance of the largest and most prominent technology companies, the FAANG stocks, as highlighted in the chart below.Ģ022 Year-to-date Stock Price Chart For META And The Other FAANG StocksĪmong the FAANG stocks, the second worst performing stock thus far this year is Meta Platforms whose share price has fallen by -53.6% only Netflix ( NFLX) has done worse with a -71.4% price drop year-to-date. In my view, META's stock price performance and brand valuation metrics are what investors should watch closely. I will focus on analyzing Meta Platforms' key metrics first, before touching on the company's recovery prospects, valuations, and outlook in subsequent sections of this article. In addition, the company's shares have a decent chance of re-rating in the short term assuming that a number of catalysts such as a Q2 revenue beat and stronger-than-expected profitability driven by lower investments materialize.

Meta Platforms is undervalued as seen with its current valuation multiples. In my prior March 25, 2022, update for META, I discussed the company's 2022 financial forecasts.īased on the analysis done in the current article, I reach the conclusion that META is an attractive investment candidate, following a correction in its share price in tandem with the sell-off in technology stocks as a group. I have a Buy rating for Meta Platforms, Inc.'s ( NASDAQ: META) shares.

Meta etf stock price prediction