Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

This Is The Cheapest FAANG Stock To Buy As 2022 Kicks Off...Is It Worth The Bet?

By Investing.com (Haris Anwar/Investing.com)Stock MarketsJan 04, 2022 15:49
ph.investing.com/analysis/this-is-the-cheapest-faang-stock-to-buy-as-2022-kicks-offis-it-worth-the-bet-100712
This Is The Cheapest FAANG Stock To Buy As 2022 Kicks Off...Is It Worth The Bet?
By Investing.com (Haris Anwar/Investing.com)   |  Jan 04, 2022 15:49
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

After remaining under pressure by an array of negative developments during 2021, Meta Platforms (NASDAQ:FB) now offers an attractive risk-reward proposition for investors at the start of 2022.

FB Weekly TTM
FB Weekly TTM

The stock, which provided negative returns over the second-half of last year, looks appealing in comparison to its peer group of five mega-cap tech giants that include Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX), and Alphabet (NASDAQ:GOOGL).

Even after the December rally, Meta shares remained 10% below their September peak, a period when it faced intense scrutiny after whistleblower testimony cast a pall over its content strategy and some of its products. As a result, Facebook faced accusations that it prioritized profits over user safety and security in order to counter a years-long decline in growth metrics for key user groups, such as teens and young adults.

Still, the stock rose 24% during the full year, posting the third-highest gains among the group known as FAANGs.

Perhaps the biggest setback for FB in 2021 came in October when the Menlo Park, California-based company missed third quarter expectations and reported a below-consensus revenue outlook for Q4, warning about the impact of Apple's new privacy policy which offers users a tool to block social media apps from tracking their personal activities over the internet.

The resultant sell-off cost Meta its $1 trillion valuation and its place among the five most valuable US companies.

Notwithstanding the number and severity of 2021's negative developments, some metrics now show that these risks are already baked into the stock price. The trailing price/earnings ratio now sits below 24 and is nearing the lowest multiple since March 2020 when it dipped briefly below 23.

This was at the height of the COVID crisis and also coincided with a major low in FB stock. The company's valuation, along with expected continued growth—anticipated to be at a double-digit pace for the next several quarters—is bringing investors back.

Outperform Ratings

Analysts too remain bullish on the stock. In an Investing.com survey of 54 analysts, 45 rate the stock as “outperform.”

FB Consensus Estimates
FB Consensus Estimates

Chart: Investing.com

The average price target among those polled was $396.46, a 17% upside from its Monday close at $338.54.

FB Fair Value
FB Fair Value

Source: InvestingPro

As well, based on InvestingPro analytics, FB’s fair value is $420.56, representing a 24% upside potential.

Along with the short-term turnaround, investors have also started focusing on CEO Mark Zuckerberg’s long-term goal to transform the social media giant into a virtual reality platform. He's said he's building out the metaverse—an immersive digital environment accessed using virtual and augmented reality tools—by investing in VR and AR-powered products.

These initiatives, according to Zuckerberg, will be the basis for the next major platform for human communication, and one where he believes Facebook has a major competitive advantage.

Goldman Sachs, which has a $445 price target on Meta Platforms, believes the time is right to invest in the stock. In a recent note its analysts said:

“We expect Meta to be a long-term secular winner with regard to the metaverse and view them as well-positioned to capitalize on the next wave of computing.”

“Over the past several quarters, Meta Platforms has laid out its long-term vision for positioning the company for Web 3.0 and the metaverse as a successor to the mobile internet, including a company name change and a commitment to scaling investments against this opportunity.”

Bottom Line

Facebook’s stock has become attractive once again, after suffering many setbacks during last year. The company’s dominant position in the digital ad market and its investments in virtual reality tools suggest that long-term investors will be rewarded if they decide to own this name.

This Is The Cheapest FAANG Stock To Buy As 2022 Kicks Off...Is It Worth The Bet?
 

Related Articles

This Is The Cheapest FAANG Stock To Buy As 2022 Kicks Off...Is It Worth The Bet?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email