Meta Doesn’t Have The Returns To Justify Its Valuation

Summary:

  • Meta Platforms’ share price has surged despite continued losses in the industry.
  • The company’s financial performance has improved in developed markets, but its ad business faces threats.
  • Meta’s expenses have increased dramatically, leading to high operating losses and an expensive valuation. Customer activity growth has also slowed.
African american man in vr headset exploring metaverse world, touching virtual reality subjects

Damir Khabirov

Meta Platforms (NASDAQ: NASDAQ:META) has seen its share price skyrocket from its lows, as investors become less concerned about its AR/VR spending. Apple (NASDAQ: AAPL) entering the industry has likely been a strong source of support. The company does maintain


Analyst’s Disclosure: I/we have a beneficial long position in the shares of META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


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