Seriously, was Meta’s earnings actually that bad?

Sorry for another Meta post but I’m bamboozled by this reaction.

3-11% YOY growth for next quarter. We can take and educated estimate of a low of 5% for the whole year. Yeah that’s not great, but it’s still growth.

Company is trading at the same stock price ($220ish) as when it had $70b in revenue, $18.5b earnings.
Now it has $118b revenue, $39.5b earnings.

PE is at 16, the lowest it’s ever been.

If Metaverse plays out (it’s the name of the company, they’re going to give it their all), investor sentiment will flip and valuation can easily double as growth expectations are sparked.

There’s no new news. We already knew they were going to be investing at a current loss into metaverse.

They cited cost inflation and advertising budget cuts as a potential negative impact on revenue. Ok fine, that may be a short term headwind, but those were the kinds of headlines we saw in Q3 with other big tech companies and they turned out to still beat expectations (Apple, Microsoft, Tesla, Google).

Another note, there have been periods in almost all large-cap companies where there are spikes in earnings followed by YOY DECREASES. Then the trend continues upwards. If anything, this consolidation is good for the company. If they can keep up with revenue and earnings, whilst investing into their future, what’s the problem?

What am I missing. Does this really warrant a $200b+ discount?

Edit: Apple privacy change is only estimated to have $10b revenue impact


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