Meta Platforms, Inc. (NASDAQ: META) Technical Analysis & Stock Performance Predictions

StockInvest.us, 2 weeks ago

META Technical Analysis

Meta Platforms, Inc. (NASDAQ: META) closed at $519.56 on June 27, 2024, marking a 1.26% increase from the previous day with a change of $6.44. The stock traded between a low of $513.90 and a high of $522.83, approaching its yearly high of $531.49. The Relative Strength Index (RSI14) is at 70, indicating that the stock might be in overbought territory. The Moving Average Convergence Divergence (MACD) at 13.99 suggests a bullish trend over the recent months.

The 50-day moving average is $479.90, and the 200-day moving average stands at $410.35, showing a strong upward momentum in the medium and long term. The Average True Range (ATR) of 2.14 indicates a moderate level of volatility. Notably, the current price is just below the identified resistance level of $519.83.

Fundamental Analysis

Meta Platforms is showing robust financial health with a market capitalization of $1.32 trillion. The Earnings Per Share (EPS) is a solid $17.39, translating to a Price-to-Earnings (PE) ratio of 29.88. This PE ratio, while high, reflects the market's expectations of strong future earnings growth. With an upcoming earnings announcement on July 24, 2024, investor sentiment could be influenced by any new financial revelations.

The discounted cash flow (DCF) valuation of $461.82 is below the current market price, indicating potential overvaluation based on future cash flow projections. Analyst sentiment remains generally positive, with 43 'buy' or 'strong buy' ratings versus 9 'hold' or 'sell' ratings, and a target median price of $480. However, the target consensus of $407.49 suggests caution over reliance on consensus estimates.

News Impact

META Recent news could pose potential risks for Meta Platforms. The company faces the possibility of blocking news content in Australia due to regulatory issues over licensing fees. This may impact user engagement and ad revenues in that market. Additionally, the revival of a class-action lawsuit accusing Meta of preferring hiring foreign workers over U.S. citizens adds further legal and reputational risk. These factors could influence investor sentiment negatively in the short to medium term.

Stock Performance Predictions

For the next trading day (June 28, 2024), the stock could experience a slight pullback due to the proximity to the resistance level of $519.83. Investors may exercise caution given the overbought RSI and looming regulatory and legal issues.

Looking into the upcoming week, the technical momentum might sustain the stock price within the current range unless significant news alters market conditions. The RSI may cool off, leading to sideways or slightly downward movement if the legal risks escalate or if the Australian regulatory situation deteriorates.

Intrinsic Value and Long-Term Investment Potential

Despite short-term uncertainties, Meta Platforms' strong market position, innovative product suite, and growing user base support a favorable long-term growth outlook. The PE ratio suggests that investors expect continued strong earnings growth. However, the DCF value implies that current prices may hold a premium, which could correct if growth rates waver.

Overall Evaluation

Meta Platforms, Inc. is categorized as a 'Hold.' The recent rally has brought the stock price close to its high, with potential overvaluation indicated by the DCF. The legal and regulatory challenges, along with the high RSI, suggest caution. Nonetheless, its strong fundamentals and long-term growth potential make it a solid candidate for long-term investors, pending resolution of current issues and a more attractive entry point.

Check full META forecast and analysis here.