META Stock Analysis: Momentum Near Year Highs, Short-Term Consolidation Expected, 3 weeks ago

META Technical Analysis

Meta Platforms, Inc. (META) closed at $510.60 on June 25, 2024, up 2.34%, representing a $11.69 increase. The stock's price remains close to its year high of $531.49, indicating strong upward momentum. Notably, META hit a daily high of $510.71 and experienced a low of $495.50.

META’s Relative Strength Index (RSI14) stands at 72, suggesting it is oversold and may face resistance near the current levels. The Moving Average Convergence Divergence (MACD), with a 3-month value of 12.60, indicates a bullish trend. The Average True Range (ATR) at 2.23 points to relatively moderate volatility. Support and resistance levels are noted at $493.50 and $510.92, respectively.

The stock is trading above both its 50-day and 200-day moving averages ($479.27 and $407.15 respectively), reinforcing a bullish outlook.

In the short term, due to the RSI indicating overbought levels and close proximity to resistance, Meta may face consolidation or minor pullbacks. Nevertheless, given current momentum, another attempt to breach resistance levels is plausible.

Fundamental Analysis

META has a market capitalization of $1.30 trillion, reflecting its strong position in the market. The company’s trailing twelve-month earnings per share (EPS) is $17.36, with a price-to-earnings (PE) ratio of 29.41, suggesting that the stock is relatively well-valued in the tech sector. Comparatively, the estimated intrinsic value from discounted cash flow (DCF) is $466.32, indicating the stock is trading at a premium.

The consensus analyst target price ranges from $105 to $600, with a median target of $480, indicating mixed expectations regarding META’s valuation. The consensus categorizes the stock as a 'Buy,' supported by 2 strong buys, 41 buys, 8 holds, and 1 sell rating.

The upcoming earnings announcement on July 24, 2024, could be a key event, potentially influencing short-term stock performance based on fiscal results and forward guidance.

META Relevant News Impact

Recent headlines have notably mentioned Meta's AI initiatives, adding to investor interest and potential upside. The collaboration with Hugging Face and Scaleway for an AI Accelerator Program targets European startups, reflecting Meta's continued investment in AI and innovation.

However, news about Meta using users' posts for AI training in the UK and EU, along with ongoing tension with Apple, may raise privacy concerns and regulatory scrutiny, which could impact investor sentiment.

Next Trading Day and Week Prediction

For the next trading day, June 26, 2024, META might see consolidation due to its overbought condition (RSI14=72). Price action may hover near the $510 mark, with potential minor pullbacks toward support at $493.50.

Throughout the upcoming week, META's bullish trend might be tested against the strong resistance level of $510.92. The stock is likely to maintain an upward trajectory if investor sentiment remains positive and no adverse news materializes.

Long-term Investment Potential

In the long term, META’s strong market position, diversified revenue streams from advertisements, and substantial investments in AI and the creator economy support growth. Despite trading at a premium, the overall market sentiment and future growth prospects underscore its potential.

Overall Evaluation

META can be categorized as a 'Hold' candidate in the short term given its overbought condition and potential near-term volatility. In the long term, it is a stronger consideration for those confident in continued growth and innovation in AI and digital platforms.

Check full META forecast and analysis here.