A Comprehensive Look at Meta Share Price

The recent market sell-off has taken a toll on just about every sector, but some have been hit harder than others. For example, the tech-heavy Nasdaq is down nearly 7% from its high just two weeks ago.

One area that has been particularly hard hit is the red-hot sector of cloud computing. Companies like Amazon (AMZN), Microsoft (MSFT), and Salesforce.com (CRM) have all seen their stock prices drop by double digits in the past two weeks.

And while the sell-off in these stocks may have been overdone, it has left investors wondering if now is the time to buy or if there could be more downside ahead.

One cloud stock that has been especially hard hit is MetaPlatforms (MP). The Meta share price has dropped by more than 50% over the last 12 months.

So, what’s going on with MP? And is the recent sell-off an opportunity to buy the dip or a sign that there could be more downside ahead?

Let’s take a closer look…

What’s Going on With MP?

Meta Platforms is a cloud-based enterprise software company. Its flagship product is Metaverse, a digital workspace that allows employees to securely access all of their applications and data from one central location. The company has seen strong demand for its product as more and more businesses move to the cloud.

However, the company reported second-quarter revenue of $169.5 million, down 4% from a year ago and below the $172.3 million that analysts were expecting. Meta also posted a net loss of $11.1 million, or 9 cents a share, compared with a profit of $2.2 million, or 2 cents a share, a year ago.

The stock has come under pressure in recent weeks, and is down by over 50% from its all-time high. So, what does the future hold for the Meta share price? Let’s take a look at the bulls and the bears…

The Bull Case for MP

The bulls argue that the sell-off in Meta Platforms stock is overdone and that the recent weak quarter was an anomaly. There are still plenty of reasons to be bullish on MetaPlatforms.

First, the company’s flagship product, Metaverse, is in high demand. The product is being adopted by more and more businesses as they move to the cloud.

Second, MetaPlatforms is growing quickly.

Third, MetaPlatforms has a strong balance sheet. The company has no debt and $100 million in cash. This gives the company plenty of financial flexibility to invest in growth.

Fourth, MetaPlatforms is led by a proven management team. The company’s CEO, Scott Smith, is a co-founder of Salesforce.com (CRM). He knows how to build a successful cloud company.

The Bear Case for MP

The bears argue that the recent weak quarter was not an anomaly and that MetaPlatforms is facing some serious headwinds. They point to the company’s high valuation, which is now trading at nearly 30 times sales. It has been viewed that the company previously known as ‘Facebook’ was forced to rebrand as Meta Platforms after coming under much scrutiny from its services impact on the mental health of teens. This was seen as a ploy to divert the negative publicity and not affect the company’s share price.

They also note that Meta Platforms is up against some tough competition, including Microsoft, Amazon, and Google. And they believe that the recent sell-off could be just the beginning for MP stock.

So, what’s the verdict? Is MetaPlatforms a buy or a sell?

The Verdict

There are both positive and negative factors to consider when deciding if Meta Platforms stock is a buy in August 2022.

Ultimately, it comes down to whether you believe the stock is a good long-term investment.

If you think the company's fundamentals are strong and the stock is cheap at current levels, then it could be a good buy. However, if you're concerned about the stock's technical, tainted reputation or the overall market conditions, then it may be best to wait for a better entry point.

Please be aware that this is not financial advice.