Meta Platforms: Zuckerberg Plugs The Value Gap (Rating Downgrade)

Summary:

  • Zuckerberg has leveraged his impressive collection of social media assets to weather a highly uncomfortable macroeconomic storm and once again demonstrate his abilities as a top-line executive.
  • The very same erratic market sentiment that reset its valuation to five-year lows has completely swung to the other side and now threatens to push Meta beyond its all-time highs.
  • After years of recognizing Meta as one of the best opportunities in the market, the recent stratospheric rise in the share price forces me to reanalyze my position on it.
  • With a fair value estimate of $370 per share, it has become increasingly clear that Mark Zuckerberg and his team’s pivoting have plugged the valuation gap, with much of the gains having already been made.
  • While Meta’s assets can still be leveraged to generate reasonable returns in the upcoming years, with the current price in mind, the margin of safety has effectively been erased, and above-average market returns have become far from guaranteed.

Facebook CEO Mark Zuckerberg Testifies At House Hearing

Chip Somodevilla

The past two years have marked a traumatic and rather unexpected journey for Meta Platforms, Inc. (NASDAQ:META), which has been a well-respected company that was widely recognized and hailed as one of the best investment opportunities in


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.

While I am still long Meta Platforms, I have significantly decreased my holdings in recent weeks.

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