Meta: I Missed The Boat But Still Hesitant To Jump In Now

Summary:

• Meta has been a major miss for me as the stock has generated +187% over the past ~1.5 years. Yet, I am still hesitant to buy now.
• Meta is facing a slowdown in advertising impressions amid a competitive advertising environment. These headwinds are expected to result in a challenging YoY growth stats in H1 FY25.
• Meta may have to deal with a more scrutinizing FTC Chairman, who has a more hard line stance against big tech media companies and their content management decisions.
• META stock valuations are at a small 8.6% discount vs historical levels. But the relative technicals suggest buyer exhaustion and downside potential ahead.
• TikTok is due to get banned in the US in early Jan’25, but is making an appeal a few days before the case. This is a relevant monitorable for Meta, who stands to gain from an easier competitive ads environment if its competitor is barred from operating in the US.

Performance Assessment

META (NASDAQ:META) has been a serious error of omission for me. I had rated the stock a ‘Neutral/Hold’, but it has trounced the S&P500’s (SPY) (SPX) (IVV) (VOO) performance:

Thesis

Now, I am wondering

Analyst’s Disclosure: I/we have a beneficial long position in the shares of VOO 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.

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