Meta – Is it Finally Time to Buy?

If you like this idea don’t forget to BOOST it.

Fundamental Indicators:

• Sector – Communication Services
  
• US Business Cycle Stage – late cycle, when this sector is neutral
  
• Revenue – consistent growth for the past 10 years, 25% average annual growth rate for the past 5 years but with a considerable slowdown in 2022 TTM
  
• Profits – dropping in 2022 TTM
  
• Net margin – impressive 28% but reduced from previous 30-40% levels
  
• P/E – already acceptable with 14 ratio compared to S&P500 with 21 and Communication Services sector 17
  
• Liabilities - debt ratio is at 0.26 which is within normal limits, Net Debt/ EBITDA is negative – no problems with debt
  
• Conclusion – although still good financial performance the latest reports are showing slowdown in user base and ad revenue growth, as well as high CAPEX investments into new platform Metaverse – all indicating that there are no positive signs for the new growth cycle yet, but given low PE it is likely to have another mid-term rally (see below scenarios)
  

Technical Analysis (Elliott Waves):

• Main scenario of this idea suggests that the peak of August 2021 saw completion of the first global wave, and we are currently observing formation of wave 2 (see higher timeframe graph)
  
• The sharp fall from historic high is likely to be the first leg of the overall correction in wave 2 and is shaped by ABC zigzag
  
• Wave A and B have been fully completed and wave C is also near completion with an Ending Diagonal in wave 5 (see guidelines for Ending Diagonals below)
  
• Once the current low of $154.25 is slightly pierced by the final zigzag of wave 5 we are likely to see a rally to the upside, possible scenarios are depicted below
  

This is a higher timeframe to reflect the full history of Meta and to provide full wave count:

This is the link to the guidelines for Ending Diagonals

What do you think about Meta and its short term prospects?
Also let me know if you would like to see other stocks, indices, Forex or Crypto analysed using Elliott Waves. And BOOST this idea if you like it.

Thanks