Connect with us

Business

Why Meta stock looks increasingly bullish after a brutal 2022: Analyst

News Agencies

Published

on

Why Meta stock looks increasingly bullish after a brutal 2022: Analyst

For Meta (META) this year, the road ahead will focus on better execution with fewer employees, and maybe a higher stock price, argues RBC analyst Brad Erickson.

“We think they are making improvements in terms of targeting and measurement, and we think that is translating into incremental dollar growth and advertising,” Erickson said on Yahoo Finance Live (video above).

Meta is Erickson’s top pick from his sector coverage for 2023. The bullish call comes after a brutally challenging year for Meta as the economic slowdown weighed on corporate advertising spending.

Advertisement
SUN VALLEY, IDAHO - JULY 08: CEO of Facebook Mark Zuckerberg walks to lunch following a session at the Allen & Company Sun Valley Conference on July 08, 2021 in Sun Valley, Idaho. After a year hiatus due to the COVID-19 pandemic, the world’s most wealthy and powerful businesspeople from the media, finance, and technology worlds will converge at the Sun Valley Resort for the exclusive week-long conference. (Photo by Kevin Dietsch/Getty Images)

CEO of Facebook Mark Zuckerberg walks to lunch following a session at the Allen & Company Sun Valley Conference on July 08, 2021 in Sun Valley, Idaho. (Photo by Kevin Dietsch/Getty Images)

And it wasn’t just the floundering ad market that posed problems for Meta. The overall macroeconomic climate – one that’s hammered all of Big Tech – also slammed the Facebook parent company.

“2022 was a relative disaster by almost any measure with the sector’s FY performance [and] valuation falling 56% and 53% respectively,” Erickson wrote in a Jan. 11 note about internet stocks. “Rising interest rates and broad-based inflationary pressures brought investor expectations even further back to Earth.”

Simultaneously, the company has been navigating its costly efforts to build itself out as the go-to metaverse name, having just changed its name from Facebook in 2021.

Advertisement

For the nine months ending Sept. 30, Meta’s sales were relatively unchanged, but operating income tanked by $12 billion year-over-year as the company was caught by surprise by the extent of the sales slowdown.

To stabilize its bottom line, Meta said in late November it would slash 13% of its workforce, more than 11,000 employees.

“I want to take accountability for these decisions and for how we got here,” Zuckerberg said in a message to employees at the time. “I know this is tough for everyone, and I’m especially sorry to those impacted. I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate.”

Advertisement

Meta shares have crashed 52% over the past year, but the company appears to be focusing its efforts on efficiency and is expected to say as much in its Feb. 1 earnings. Year to date, shares are up 15% as traders position for a bottom-line boost from cost-cutting efforts.

Though things don’t necessarily look great going into its 2022 earnings, Erickson believes the company is taking the right steps to restore investor confidence.

Advertisement

In the Jan. 11 note, he added that if Meta can assuage fears about ascendant competitor TikTok, it will go a long way toward getting the company to barrel forward in the right direction.

“Structurally, we like the fact that they are restoring that [demand] signal and think that can carry increasing tailwinds as we move through 2023,” Erickson said.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

Advertisement

Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.

Click here for the latest trending stock tickers of the Yahoo Finance platform

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Advertisement

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube

Advertisement
Continue Reading
Advertisement

Advertisement

Breaking News

Editor Pick’s

Latest Entertainment

The final countdown: A 'robbed' fan favorite, a pandemic champio, and an 'icon' vie for one last spot on 'AGT All-Stars' The final countdown: A 'robbed' fan favorite, a pandemic champio, and an 'icon' vie for one last spot on 'AGT All-Stars'
Entertainment34 mins ago

The final countdown: A ‘robbed’ fan favorite, a pandemic champio, and an ‘icon’ vie for one last spot on ‘AGT All-Stars’

Comedian Josh Blue, poet Brandon Leake, and viral sensation Kodi Lee compete for the one remaining spot in the ‘America’s...

Chris Brown apologizes to Robert Glasper for social outburst after losing at the Grammys Chris Brown apologizes to Robert Glasper for social outburst after losing at the Grammys
Entertainment4 hours ago

Chris Brown apologizes to Robert Glasper for social outburst after losing at the Grammys

Chris Brown is sorry for being a sore loser at the Grammy Awards. The singer, 33, took to Instagram on...

I Know What You Did Last Summer sequel with original stars in the works at Sony I Know What You Did Last Summer sequel with original stars in the works at Sony
Entertainment4 hours ago

I Know What You Did Last Summer sequel with original stars in the works at Sony

Another summer, another hook-wielding psycho killer — and maybe some familiar faces too. More than 25 years after I Know...

Could 'The Last of Us' finale beat the Oscars in the ratings? We break down the numbers Could 'The Last of Us' finale beat the Oscars in the ratings? We break down the numbers
Entertainment4 hours ago

Could ‘The Last of Us’ finale beat the Oscars in the ratings? We break down the numbers

The fungal zombies are coming for the Oscars. In a programming matchup that’s certain to create an agonizing Sophie’s choice...

Will Smith Was Going to Be a Surprise Grammys Performer — but Had to Drop Out for 'Bad Boys 4' Will Smith Was Going to Be a Surprise Grammys Performer — but Had to Drop Out for 'Bad Boys 4'
Entertainment6 hours ago

Will Smith Was Going to Be a Surprise Grammys Performer — but Had to Drop Out for ‘Bad Boys 4’

Will Smith and Martin Lawrence Confirm Bad Boys 4 Is in the Works: ‘It’s Official, Y’all!’ Will Smith/Instagram Will Smith...

Ben Affleck miserable at the Grammys? Jennifer Lopez says she had 'the best time' with him Ben Affleck miserable at the Grammys? Jennifer Lopez says she had 'the best time' with him
Entertainment6 hours ago

Ben Affleck miserable at the Grammys? Jennifer Lopez says she had ‘the best time’ with him

Jennifer Lopez and Ben Affleck at the 65th Grammy Awards at Crypto.com Arena on February 05, 2023 in Los Angeles,...

David Bowie Producer Tony Visconti Rejects Harry Styles Comparisons David Bowie Producer Tony Visconti Rejects Harry Styles Comparisons
Entertainment10 hours ago

David Bowie Producer Tony Visconti Rejects Harry Styles Comparisons

The post David Bowie Producer Tony Visconti Rejects Harry Styles Comparisons appeared first on Consequence. Harry Styles might be one...

Maria Shriver talks about feeling 'invisible' during Arnold Schwarzenegger marriage Maria Shriver talks about feeling 'invisible' during Arnold Schwarzenegger marriage
Entertainment10 hours ago

Maria Shriver talks about feeling ‘invisible’ during Arnold Schwarzenegger marriage

Maria Shriver talks about her ‘journey to re-evaluate everything in my life’ after her marriage toArnold Schwarzenegger ended. (Photo: Bonnie...

Advertisement

Latest Sports

Super Bowl injuries: Latest on Patrick Mahomes, other stars Super Bowl injuries: Latest on Patrick Mahomes, other stars
Sports42 mins ago

Super Bowl injuries: Latest on Patrick Mahomes, other stars

Patrick Mahomes has the most notable injury ahead of Super Bowl LVII. Here's the latest news for the Eagles and...

Patriots show willingness to spend out of coaching hole with Adrian Klemm hire Patriots show willingness to spend out of coaching hole with Adrian Klemm hire
Sports1 hour ago

Patriots show willingness to spend out of coaching hole with Adrian Klemm hire

The Patriots have, on a few occasions, spent big to fix glaring roster holes. This offseason is different, writes Phil...

Nick Sirianni on being fired by Andy Reid: You always have this little chip on your shoulder Nick Sirianni on being fired by Andy Reid: You always have this little chip on your shoulder
Sports2 hours ago

Nick Sirianni on being fired by Andy Reid: You always have this little chip on your shoulder

After the Chiefs beat the Bengals in the AFC Championship Game, it was hard to miss people talking about the...

Steph Curry injury boils down to high-ankle sprain variant, doctor clarifies Steph Curry injury boils down to high-ankle sprain variant, doctor clarifies
Sports2 hours ago

Steph Curry injury boils down to high-ankle sprain variant, doctor clarifies

What exactly did that Steph Curry injury update mean? Dr. Seth Sherman of Stanford Medicine clarified any lingering questions.

What Chris Partridge's return to Michigan means for future staff What Chris Partridge's return to Michigan means for future staff
Sports2 hours ago

What Chris Partridge’s return to Michigan means for future staff

What we know is Chris Partridge is returning to Ann Arbor to coach with the Michigan Wolverines. First, it's important...

It's official: We know how long the 13th hole will play at this year's Masters It's official: We know how long the 13th hole will play at this year's Masters
Sports3 hours ago

It’s official: We know how long the 13th hole will play at this year’s Masters

The Masters Tournament released its annual media guide on Monday, and inside that are the listed yardages for this year’s...

Follow live: Super Bowl Opening Night Follow live: Super Bowl Opening Night
Sports3 hours ago

Follow live: Super Bowl Opening Night

Yahoo Sports is on the scene in Arizona, so come hang out with us as fans and media get to...

NASCAR driver Kyle Busch arrested in Mexico in January for handgun possession NASCAR driver Kyle Busch arrested in Mexico in January for handgun possession
Sports4 hours ago

NASCAR driver Kyle Busch arrested in Mexico in January for handgun possession

Busch, 37, was arrested on Jan. 27. He finished third in Sunday's exhibition opener for the 2023 NASCAR Cup Series...

Technology Hot News

Led by "Amazon" and "Microsoft" . Led by "Amazon" and "Microsoft" .
Technology3 weeks ago

Led by "Amazon" and "Microsoft" .. the technology giants are planning to lay off 64,000 employees

After 10 years of driving the stock market bull run, big tech companies are racing to downsize staff to adapt...

Apple introduces MacBooks with new M2 processors Apple introduces MacBooks with new M2 processors
Technology3 weeks ago

Apple introduces MacBooks with new M2 processors

Yesterday, Tuesday, Apple unveiled MacBooks powered by the new, faster “M2 Pro” and “M2 Max” processor chips, in a surprise...

All you need to know about the upcoming Galaxy S23 phones from Samsung All you need to know about the upcoming Galaxy S23 phones from Samsung
Technology3 weeks ago

All you need to know about the upcoming Galaxy S23 phones from Samsung

Samsung has officially announced that the (Galaxy Unpacked 2023) event will be held this year on Wednesday, February 1, which...

FTX Exchange Announces Hacking and Stolen $415 Million in Cryptocurrency FTX Exchange Announces Hacking and Stolen $415 Million in Cryptocurrency
Technology3 weeks ago

FTX Exchange Announces Hacking and Stolen $415 Million in Cryptocurrency

Bankrupt American cryptocurrency firm FTX announced today, Wednesday, that $415 million in cryptocurrency has been hacked and stolen from the...

Because of a "fraudulent tweet".. Because of a "fraudulent tweet"..
Technology3 weeks ago

Because of a "fraudulent tweet"… Elon Musk's trial begins

Elon Musk's trial began Tuesday in San Francisco with the selection of jury members who will have to decide whether...

An electric spoon replaces salt and spices, but with conditions An electric spoon replaces salt and spices, but with conditions
Technology3 weeks ago

An electric spoon replaces salt and spices, but with conditions

Experts have developed an electric spoon that is able to replace spices and flavors and affect the taste buds in...

The biggest dangers of using tracking devices. The biggest dangers of using tracking devices.
Technology3 weeks ago

The biggest dangers of using tracking devices.. so you can escape?

If you spot an unknown Bluetooth tagging device, there are ways to disable the device so it can't track your...

New Twitter. New Twitter.
Technology3 weeks ago

New Twitter.. For You tab to web version

The Twitter platform announced that it will bring the new tab (For You), which launched last Tuesday for iPhones and...

Advertisement