Whether of not META shares are inexpensive depends upon what you believe 2023 and 2024 estimates will look like. We believe the global macro environment will soften for the remainder of this year and next and that META’s numbers over the next few quarters will reflect this difficult macro demand environment.
- META is in the process of remaking the company – an enormous undertaking.
- Changes to Apple (AAPL) iOS have permanently impaired the value proposition of META’s Ad business (while boosting AAPL’s mobile Ad prospects).
- We expect the macro demand environment to soften for the remainder of this year and next, especially in Europe as inflation persists and as yields move higher. This will hammer Ad buyer demand.
- It is no certain bet that META’s “metaverse” strategy will pay off.
See our valuation table and estimates below. Our META estimates are meant to reflect downside risk. While they skew negative, they are not necessarily the worst case scenario:
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