Source: PaxForex Premium Analytics Portal, Fundamental Insight
Meta Platforms has enjoyed a remarkable year, with its stock doubling since the beginning of 2023. While broader equities have also rebounded, Meta's performance stands out. Despite this impressive run, there are compelling reasons to consider investing in this leading social media company:
Reviving Advertising Market
Meta Platforms faced challenges in the first nine months of 2022 due to a slowdown in ad spending. However, the company rebounded strongly in the third quarter, with revenues reaching $34.1 billion, marking a 23% year-over-year increase. This growth was the highest since Q3 2021, demonstrating Meta's resilience and ability to overcome challenging periods.
Effective Initiatives
Beyond robust revenue growth, Meta Platforms has taken proactive measures to manage its costs efficiently. The company has implemented strategic initiatives, including a significant reduction in its workforce and a decrease in real estate holdings. These actions have resulted in a 7% year-over-year decrease in costs, amounting to $20.4 billion. As a result, the company projects its 2023 expenses to fall in the $87 billion to $89 billion range, which is lower than the previously expected expenses of $88 billion to $91 billion.
Growth Potential
Meta Platforms possesses significant growth potential due to its expansive ecosystem and monetization capabilities. The company reported 3.96 billion monthly active users across its various websites and apps by the end of the third quarter, marking a 7% year-over-year increase. Several strategic initiatives have contributed to this growth, such as the introduction of Reels, short-form videos on Instagram and Facebook.
Utilizing artificial intelligence (AI), Meta Platforms has enhanced user engagement by offering personalized recommendations, leading to a remarkable 40% increase in time spent on Instagram. Deeper user engagement makes the platform more appealing to advertisers. Additionally, Meta's Business messaging on WhatsApp is gaining traction, especially in India, where over 60% of the population engages with business accounts on WhatsApp weekly.
While not all initiatives have yielded significant results, such as Threads and Reality Labs operating at a loss, Meta Platforms' overall ecosystem is geared towards maximizing revenue from its extensive user base. With its improving financial performance and promising prospects, Meta Platforms remains a strong investment option. The company's ongoing efforts in WhatsApp monetization, coupled with the success of Reels and AI-driven recommendations, position Meta Platforms to deliver market-beating returns for years to come, making it an attractive stock to consider for investment.
As long as the price is above 287.00, follow the recommendations below:
- Time frame: D1
- Recommendation: long position
- Entry point: 301.34
- Take Profit 1: 317.00
- Take Profit 2: 340.00
Alternative scenario:
If the level of 287.00 is broken-down, follow the recommendations below:
- Time frame: D1
- Recommendation: short position
- Entry point: 287.00
- Take Profit 1: 275.00
- Take Profit 2: 261.00
