Should You Buy Meta Platforms Stock In 2024?

Should You Buy Meta Platforms Stock In 2024?

Meta Platforms stock (NASDAQ: META) has been making waves in the stock market, recently surpassing all-time highs and boasting a remarkable 212% surge in the past year. Investors are now faced with the crucial question: Should you buy Meta Platforms stock in 2024?

Meta Platforms stock price

The social media giant’s fourth-quarter and full-year 2023 results have been nothing short of impressive, with a reported revenue of $135 billion, marking a substantial 16% increase from the previous year. Meta’s market dominance, owning popular platforms like Facebook, Instagram, Threads, and WhatsApp, positions it as a formidable player in the social media landscape, with approximately 3.2 billion people using at least one of its apps daily.

However, the soaring Meta Platforms stock price has raised concerns about valuation. Meta’s price-to-earnings ratio (P/E) now exceeds 35, nearing five-year highs. This significant increase has made some analysts cautious, suggesting that the stock may be trading at a premium. The introduction of a dividend, while a positive move for investors, comes with a yield of just over 0.4%, significantly below the S&P 500 average of 1.4%. Income-focused investors may find the dividend less appealing at such levels.

2024 outlook for Meta Platforms stock

The company’s outlook for 2024 also introduces a level of uncertainty. While Q1 2024 is projected to see revenue between $34.5 billion and $37 billion, representing a healthy 25% growth rate at the midpoint, Meta declined to provide a revenue outlook for the full year. Rising expenses, driven by higher infrastructure costs, wage expenses, and increased operating losses for the metaverse segment, Reality Labs, contribute to this uncertainty.

Analysts suggest that potential investors might want to wait for a more opportune time to buy in, considering the stock’s elevated valuation. With Meta’s P/E ratio near a five-year high, some recommend holding out for a lower valuation before considering an investment in the social media giant. While Meta’s long-term growth potential remains strong, short-term challenges and the stock’s current valuation raises questions about the timing of entry into the market.

While Meta Platforms stock showcases impressive financials and market dominance, the decision to buy its stock in 2024 hinges on individual risk tolerance, investment goals, and the willingness to navigate the current uncertainties in the market.

Also read: Meta Stock Analysis and Price Prediction

Leave a Comment

Your email address will not be published. Required fields are marked *