Several folks on this thread predicted this exact scenario months ago. Hard to say if many of these bottomed or how long it will take for them to climb back, if ever. I’m still hoping M&A heats up or some of the companies go private.
OT: Stock and Investment Talk
- Thread starter RU-05
- Start date
S&P 500 is about 4% off of ATH. 26% of it is made up of AAPL, MSFT, GOOGL, AMZN, FB, NVDA, and TSLA. It has essentially become a tech index.
Your can't scared your way past this.
Uh oh...ATT CEO and Discovery CEO interview tomorrow from Pebble Beach. @RUAldo by your Stankey mouth opening indicator, get out now lol.
Level-headed analysis:
Meta Reports Mixed Q4 Results; Sharp Decline in the Stock Created a Buying Opportunity; $400 FVE (Morningstar)
Analyst Note | Updated Feb 03, 2022
Meta Platforms, the parent of Facebook, reported mixed fourth-quarter 2021 results. Revenue was slightly ahead of expectations but the firm missed on the bottom line due to higher investments in not only the reality labs segment but also in reels and in overall improvement of its advertising back-end. The firm’s first-quarter 2022 revenue guidance was below the consensus estimates, driving the stock down 23% in after-hours trading. We have slightly lowered our revenue growth assumptions for Meta, resulting in a $400 fair value estimate, 1% lower than our previous valuation. We don’t think the market’s reaction is warranted and believe wide-moat Meta’s shares now present an attractive investment opportunity.
Total fourth-quarter revenue came in at $33.7 billion, up 20% year over year. Advertising revenue increased 25% as businesses continued to allocate their ad dollars to Meta’s platforms. The family monthly active people count increased to 3.59 billion during the quarter, from 3.58 billion in the previous quarter and 3.3 billion the year before. Average revenue generated per person increased 9% from last year and 15% from the prior quarter, indicative of healthy advertising demand. With increase in investments in metaverse and the firm’s advertising offerings, operating margin declined nearly five percentage points to around 33% during the quarter.
Management believes inflation-related cost pressures and limited access to data due to Apple’s policy changes may slow growth in demand and overall advertising revenue, most of which we had already modeled into our projections. But we think Meta remains an attractive business. Its core advertising business, with nearly a 50% operating margin, continues to perform well. While possibly lower ad prices (mainly for short form video ads) and Apple’s iOS changes may hurt ad revenue growth more than we initially expected, we think these impacts will be short-term.
What is everyone arguing about? Yes, many of the stocks were overpriced and have been adjusted. I seldom brought any of the high flyers. I purchased stocks that I felt were valued right but you never always get it right. FB PE is now in the 20’s but in the long run will continue to rise in 6-12 months. This happened to some of your stocks that you own or you wouldn’t have own stocks for a long time, you would have sold them already.
AMZN is interesting and I may sell some before earnings. I’ll sell some and buy later if it fall. Normally I sell the stocks before earnings come out because of the FB situation but this quarter is difficult to read.
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I'll be buying today. I've been patiently waiting to see if it would come to me and it has now. If it goes down lower, I'll buy more.
Doesn’t seem like many of the talking heads or analysts got FB or PYPL right and held those stocks too. I’d be concerned about Amazon.
Anyone have thoughts on Pinterest? Took a beating last night on FB results and has gotten demolished recently. But it’s business is not traditional social.
I’m afraid that AMZN going to new lows the last two weeks show there are people that have information maybe inside that have been selling. Sell now and be ready to fight (buy) another day.
All techs, wrong, all stocks, with PE over 30 something need to be worried.
Amazon could easily have a blowout quarter like Google or a major stinker like FB. That’s why it’s such a conundrum. I’d also add that for some reason Amazon isn’t getting the air time like it used to.
AMZN could have both. The online retail could struggle, while AWS could have great #'s.
As per the former the fact that UPS had a good qtr, while dealing with similar labor issues, is some what encouraging.
It did miss earnings big last qtr, but the market didn't hate it.
Remember, that "major stinker" was essentially a razor thin miss. If AMZN has a similar miss and it drops 20%, load the freaking boat!
As is often the case, the problem with FB's qtr was the guidance, and I imagine AMZN is pretty safe in that regards. On both cloud and online retail. But I guess no one expected FB to guide below expectations either.
Kind of lost in the sauce though, is that while FB guided below expectations, they could always beat that guidance. And aside from this qtr, they always beat. All about execution.
I mentioned that the day of UPS' earnings and how much you can read through to AMZN but AMZN has its own delivery network as well so don't know. But what you can think of is if UPS is shipping a lot then people could be buying a lot. PYPL some said could be a harbinger to AMZN but then I look at V and MA and they would be a positive on shopping habits.
AWS I expect to be good. Nonetheless, while I said it can go either way I'd probably skew more to the negative and it being vulnerable just because of overall sentiment. Also after earnings (which have been a mixed bag) what's left to buoy the market appreciably further. But like I say if it goes up fine, if it comes down fine I'm good either way lol.
A technical guy (I know how you love them lol) was on earlier and he said the Nasdaq has been up 13 years in a row and the Dow (not an index that matters in my mind) and more importantly the SP have never done that. A well loved and supposedly cheap stock like FB getting hit like that doesn't signal things are all hunky dory. He showed the channel the Nasdaq has been in that 13 years and just a move to the midpoint of that channel would be about 25% from the high. If it went lower it would be more. He had a call earlier where he liked semis (you should like that) and still thinks there's more room to run for them despite their recent good performance. That they've not been as loved as other parts of tech so there could be more ahead.
Nobody really seems to care about earnings right now it’s all about forward guidance. Ideally, Zuckerberg was trying to get the regulators off his back by mentioning TikTok 35 times during the call and maybe it’s the old under promise - over deliver ploy.
They probably just played the game, knew it was going to be a slight miss this quarter, so sandbag guidance to set-up the massive beat next quarter. Happens all the time.
Good stuff on AMZN. As for the Daq, remember that it was still recovering from the dot.com crash when the 13 year run started. Also, big tech has become not something cool, not something discretionary, but rather something that is truly integrated into everyday life for practically all Americans and most of the developed world. Big tech is life.
The growth in the Daq reflects this, not investors being nutty.
I saw that this morning and you could view it that way if you’re cynical but I wouldn’t rule out anything. He did what the PYPL CEO should have done. You get all the bad news out. Don't trickle out info so your stock can get hit repeatedly. Kitchen sink, reset and move forward.
I'm still buying it but he doesn't paint a nice picture. Less coming in and more going out (development of the metaverse) and an unknown if all that spend will lead to something meaningful. I kind of view it like Steve Ballmer at worst. He wasted resources left and right at MSFT but it's a strong business so it could absorb it to an extent. If not a growth stock, I'm okay with it being a value stock and the multiple isn't crazy.
Big Tech yes but not all tech. Just like a rising tide lifts all boats, a tsunami (not that this is one) can wash everyone out. If sentiment isn't good, even if you're good company, in the short term at least you still can get hit. To me currently sentiment is eh at best. Short term I think possible rockiness regardless of big tech or not, long term I think big tech will be okay.
Well my order filled premarket and bought a little FB at 246.75. I wouldn't rule out a drop to the low 200s and that would take you to prepandemic levels as well. I'm willing to buy more if it does.
Mind you I didn't use the 3 day rule on this one. It all depends on the stock and if I think it's worth it regardless.
Mind you I didn't use the 3 day rule on this one. It all depends on the stock and if I think it's worth it regardless.
Likely be picking up more UPRO and TQQQ this morning. Gotta take advantage of these dips and slowly build positions.
says the guy who owns a lot of shares….LOL.
ETA. Very good article on Bloomberg about FB.
In case you missed it:
Meta Reports Mixed Q4 Results; Sharp Decline in the Stock Created a Buying Opportunity; $400 FVE (Morningstar)
Analyst Note | Updated Feb 03, 2022
Meta Platforms, the parent of Facebook, reported mixed fourth-quarter 2021 results. Revenue was slightly ahead of expectations but the firm missed on the bottom line due to higher investments in not only the reality labs segment but also in reels and in overall improvement of its advertising back-end. The firm’s first-quarter 2022 revenue guidance was below the consensus estimates, driving the stock down 23% in after-hours trading. We have slightly lowered our revenue growth assumptions for Meta, resulting in a $400 fair value estimate, 1% lower than our previous valuation. We don’t think the market’s reaction is warranted and believe wide-moat Meta’s shares now present an attractive investment opportunity.
Total fourth-quarter revenue came in at $33.7 billion, up 20% year over year. Advertising revenue increased 25% as businesses continued to allocate their ad dollars to Meta’s platforms. The family monthly active people count increased to 3.59 billion during the quarter, from 3.58 billion in the previous quarter and 3.3 billion the year before. Average revenue generated per person increased 9% from last year and 15% from the prior quarter, indicative of healthy advertising demand. With increase in investments in metaverse and the firm’s advertising offerings, operating margin declined nearly five percentage points to around 33% during the quarter.
Management believes inflation-related cost pressures and limited access to data due to Apple’s policy changes may slow growth in demand and overall advertising revenue, most of which we had already modeled into our projections. But we think Meta remains an attractive business. Its core advertising business, with nearly a 50% operating margin, continues to perform well. While possibly lower ad prices (mainly for short form video ads) and Apple’s iOS changes may hurt ad revenue growth more than we initially expected, we think these impacts will be short-term.
Loaded - FB $260 March 11 Calls. See you on the moon!
At what price would you buy? I think there's support in the 240s so as I do sometimes I split the diff on the high and low of what I think is a range. Like I did when I added some MSFT recently and when I sold some of the position I bought as well.
Next area would be the low 200s area if it got there. That would coincide to similar percentage drops in 2018 and 2020 and there's support there too and it's around prepandemic levels at that point.
What fundamentals are bad? Less active users, slowing active user growth, Apple privacy controls hampering ad revenue, user trend towards lower ad revenue areas, spend on Metaverse with an unknown an end point at the moment. Anything else?
MSFT at one time too I remember pundits saying PCs are dying, secular decline etc...it was an opportunity to buy which I did. I said to myself this company is in the guts of so many enterprises, they will be fine, they're not going anywhere. Similarly, at one time PG was panned as no growth no new product lines etc...but I'm like this company makes things that are in everyone's daily lives and now they've reorganized (with the instigating of Peltz) and have gone more into health and beauty and have some decent growth as well. KO another one, under the gun with the trend of healthy and sugar is bad etc...and not as diversified with snacks like PEP but they've been a fine slow and steady stock over the years.
FB is also in the guts of millions and millions of peoples lives. It's probably getting to a saturation point for how much it can grow in terms of users but how much will it contract to where it materially hits how much revenue they can make. Similar to PG, MSFT, KO I think they will work through it and figure it out. It doesn't mean it can't go lower and there won't be some pain along the way but it can be an opportunity to pick things up at cheaper prices and reasonable valuations and over time you'll be rewarded. I have core positions in all these stocks I mention at way lower prices from years ago. What I buy here is a trade but willing to own at the prices I buy if it becomes necessary.
I sold some when earning came out yesterday night and down 40 pts and now buying some back at 80 pts down. I see PE is 17 trailing earnings.
| Close | 323.00 |
| Open | 244.65 |
| Bid | 242.79 x 800 |
| Ask | 242.81 x 1100 |
| Day's Range | 237.07 - 248.00 |
| 52 Week Range | 237.07 - 384.33 |
| Volume | 106,698,537 |
| Avg. Volume | 20,963,208 |
| Market Cap | 676.886B |
| Beta (5Y Monthly) | 1.28 |
| PE Ratio (TTM) | 17.41 |
| EPS (TTM) | 13.97 |
| Earnings Date | Apr 26, 2022 - May 02, 202 |
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I never owned it because I don’t use FB. Personally, not a stock I would buy. Just more downside than rewards right now. You covered all the risks.
I really think this is an under-appreciated standpoint. FB (Meta) is just so damn toxic in so many demos right now that can it really keep this up long term?
Both sides of political aisle are targeting them for different reasons, and how many companies can we say really have that problem? And Zuckerberg’s up there for least-liked/trusted CEO of all.
WhatsApp filled with spam/scammers. Instagram losing popularity. And facebook been dead for awhile. Oculus is cool (but will it work) and the Meta direction is a joke.
Obviously international can keep them going, and they’ll keep buying competitors that gain traction, and this is no myspace — but I do feel that this may be a case where public sentiment carries more weight than even financials.
I once debated Walmart vs Amazon here as some were of the opinion WMT was going the way of the dodo etc...and that WMT was hated etc..I said this company makes billions of dollars and is willing to adapt and evolve and isn't going anywhere as long they do that. I said AMZN will take it's place in the hated category soon enough. That ended up all being true. People say they hate this or that but in the end they generally use these things they supposedly "hate" etc.. Do people hate Google too, I'd guess yes in the same way they don't like big tech but yet they still use it by and large. So they can hate WMT, AMZN, GOOGL etc..but in the end they are still used.
Millions of people use FB and its associate platforms and that's not going anywhere any time soon and they will still be making money on it. I don't expect that to change. They need to adapt I'll go along with that. Not sure if this VR stuff is the right avenue but I think they will figure it out just like the examples I gave in above posts.
EPS figures to be 14 bucks. What multiple do you slap on that with their 3-11% growth estimates?
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