Is Meta Platforms stock overbought?


social media platform operator Meta Platforms Inc. (NASDAQ: META) The stock is up 22% year-to-date (YTD) and has a one-year performance of 87%. Its impressive jump comes from layoffs, expense reduction and stabilization in its advertising business. That leaves investors to ponder whether this giant has any further upside as shares are trading at 22X earnings right now. Meta is working on its generative artificial intelligence (AI) technology to drive results around the world Ecosystem,

Its Q1 2023 results were quite impressive, leading the shares to gain 14%. there was a significant difference in the results Snap Inc. (NASDAQ:SNAP) And Pinterest Inc. (NASDAQ: PINS), both of which saw double-digit sales. The most significant decline (41%) was a revenue decline for its virtual reality division Reality Labs.

artificial intelligence

Instagram Reels continues to grow its all-app engagement, driving more than 24% growth in time spent on Instagram. More than 20% of the content in Facebook and Instagram feeds is artificial intelligence (AI) recommendations. AI work has helped improve monetization Reels efficiency increased by 30% on Instagram and 40% on Facebook. AI is expected to be embedded in many more offerings in the coming months. The metaverse and AI are related because mixed reality is built on AI stack technologies.

big bang

On April 26, 2023, Meta released its 2023 first quarter results for the quarter ending March 2023. $1.95 profit, down from $0.25. Revenue grew 2.6% YoY to $27.64 billion versus the $27.66 billion consensus analyst estimate. Household Daily Active People (DAPs) grew 5% YoY to 3.02 billion.

Facebook hits a new milestone with 200 million daily active users (DAU) in the US and Canada and 2 billion worldwide. The company is seeing strong engagement and good monetization efficiency across apps. After three rounds of layoffs, the company will resume hiring after May 2023, increasing the workforce from 1% to 2% in 2024.

Facebook’s monthly active users (MAUs) grew by 2% to 2.99 billion. Ad impressions and cost per ad grew 26% YoY, and average cost (17%) decreased. The company bought back $9.22 billion in Class A shares and still has $41.73 billion available in authorized repurchases. The company closed the quarter with $37.4 billion in cash and marketable securities through March 31, 2023.

Mark Zuckerberg, CEO of Meta Platforms, commented, “Our AI work is driving great results across our apps and business. We’re getting more efficient at building better products faster and reinventing ourselves to deliver on our long-term vision.” Keeping in position.”


Meta has nearly completed its 2022 restructuring and spent a pre-tax amount of $621 million in Q1 2023. The layoff of more than 10,000 employees has affected its family of apps and Reality Labs.

reverse guidance

Meta raised its Q2 2023 revenue from $29.5 billion to $32 billion versus the $29.47 billion consensus analyst estimate. However, the company expects Reality Labs’ operating loss to widen year-over-year. Meta also slashed its full-year 2023 expense guidance from $86 billion to $90 billion to $86 billion to $92 billion. Capex remains unchanged at $30 billion to $33 billion. This reflects building out Meta’s AI capability to support ads, feeds and reels, and increasing investment in capacity for generative AI initiatives. Meta incurred $617 million to $621 million in restructuring charges in Q1 2023.

Meta Platforms Analyst Ratings and Price Targets Can be found on Marketbeat.

Weekly Seed Wave and Cup and Handle Breakout

The weekly candlestick chart for the meta has been strong due to two powerful price patterns. The weekly Cup lip line debuted at $196.99 on May 23, 2022, as shares fell to a late October 2022 low of $88.09. $196.99 Cup Lip line in late January 2023. Shares fell to $167.66 before surging and forming a handle. The second weekly MSL trigger breakout at $186.62 launched the cup and handle breakout in March 2023 squeezing the shares through the $196.99 cup lip line.

The weekly seed wave was triggered on a simultaneous cup and handle breakout. A seed wave forms after two higher MSLs. Potential Reversal Zones (PRZs) 1.27, 1.414 and 1.618 are price targets and reversal levels based on the Fibonacci Extension Ratio connecting the first MSL to the first MSL to yield the price. Each PRZ is a potential reversal zone in which bulls can take profits, and bears can consider selling short. The most powerful PRZ is the last 1.68 level at $264.57. Pullback supports are located at $208.66, $196.99, the $186.62 weekly MSL trigger, and the $167.66 handle low.

The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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