Meta Platforms (NASDAQ: META) Shows Technical Resilience Amid Market Correction, 3 weeks ago

META Technical Analysis

Meta Platforms, Inc. (NASDAQ: META) closed at $504.22 on June 28, 2024, marking a notable decline of $15.34 or 2.95%. The stock's performance witnessed a low of $503.88 and a high of $521.88 during the day. Currently, the Relative Strength Index (RSI14) stands at 57, suggesting neutral market sentiment. The stock remains above both its 50-day moving average ($479.90) and 200-day moving average ($410.35), signaling a sustained upward trend. Additionally, the Moving Average Convergence Divergence (MACD) value of 14.28 portrays a bullish outlook. However, the recent dip close to the support level of $493.50 and resistance at $510.92 must be closely watched, especially given the modest Average True Range (ATR) of 2.30, indicating lower volatility.

Expectations for the next trading day on July 01, 2024, should consider the previous day's correction. Provided the support at $493.50 holds, a rebound towards the resistance at $510.92 could be anticipated within the upcoming week. Should support fail, a minor downtrend towards the stop-loss level of $483.55 is plausible.

Fundamental Analysis

Meta Platforms commands a substantial market capitalization of $1.28 trillion, driven in part by robust earnings per share (EPS) of $17.41 and a price-to-earnings (PE) ratio of 28.96, slightly elevated for the tech sector but justifiable given its growth prospects. The stock's target median of $480 and consensus target of $407.49 from analysts reflect mixed beliefs about its fair valuation, indicating potential overvaluation situations. The year-to-date high of $531.49 underscores significant investor confidence, bolstered by Meta's efforts in VR and AI, as highlighted in recent news.

META Despite the recent downward movement, Meta remains a strong competitor in both VR and AI sectors. The upcoming earnings announcement on July 24, 2024, will be pivotal. Therefore, short-term caution is warranted.

Intrinsic Value & Long-Term Potential

Discounted Cash Flow (DCF) valuation estimates the intrinsic value of Meta at approximately $464.39, suggesting a slight overvaluation given the current share price. However, Meta's strategic investments in AI and VR technologies advocate a progressive future outlook. Upcoming innovations and continued market dominance may eventually justify the premium.

Overall Evaluation

Based on the combined technical resilience, solid fundamentals, and growth potential in innovative sectors like AI and VR, Meta Platforms, Inc. can be classified as a 'Hold'. The stock merits attention owing to its long-term growth trajectory and intrinsic value, but investors should approach with vigilance given the current overvaluation indicators and impending earnings announcement.

Check full META forecast and analysis here.