Why is meta stock down?
Why is meta stock at 8.8 P/E ratio when Snap has negative e meaning no P/E ratio Tesla at 70 P/E ratio Apple at 25 P/E ratio Oracle at 36 P/E ratio Amazon at 88 P/E ratio IBM at 100 P/E ratio Google at 18 P/E ratio I read the entire “The Intelligent Investor” book recommended by Buffet and this metric was the most heavily emphasized over and over again Yes r and d in ai and ar/vr is costly but Amazon spends entire cash flow on r and d and look at their pe What am I missing? 250
The other companies have a good future. Meta’s future is unclear. Amazon and Tesla’s are probably too high.
Invest in Index funds through think and thin of the markets - especially thin. Do it for 20-30 years. Thank me later.
Meta’s future earnings outlook doesn’t look good. Apple’s iPhone privacy features affected its advertisement revenue. The metaverse bet is causing it to burn a lot of cash with no success guarantee. If you think Zuck will figure it out, the current prices are a steal. On the other hand, the company might slowly become irrelevant.
P/e represents what market is estimating for the potential growth of the company. Over few years market started believing that meta might not grow much further and hence p/e is decreased
P/E is backward looking. Stock price is based off of future expected value/cashflows… and meta’s future with zuck at the wheel looks pretty grim.
Because meta employees mostly work on MMH projects
Meta used to be priced as a growth tech stock. But no one liked Zucks plans right now. They are also getting wrecked by iOS privacy changes.
market is punishing Zuck for being stubborn. He owns over 50% vote rights and he can rule the company autocratically
1) Meta plans to burn $10B (on metaverse) for the next 10years with a negative FCF. Obviously no one believes in the Metaverse except Zuck himself. 2) tiktok competition 3) apple ios privacy/ ad policy/ apple tax 4) strong usd headwinds
is it 10 billion per year?
The same reason why Peloton stock went to 150$. Markets over exaggerate growth and over exaggerate lack of growth. The only option we retail investors have is to wait patiently.