U.S. stock technology giant Meta fell more than 20% after hours, was it mistakenly killed by the market?

Facebook changed its name to Meta Platforms and fully developed the meta-universe, meta was once placed high expectations by the market. With the advantages of the largest social platform in the United States and the global traffic pool, Meta's revenue and net profit have maintained a rapid growth trend in recent years, and the stock market value has once reached the threshold of trillions of US dollars.

In the sensitive period of the disclosure of the US stock financial report, from the recent analysis of the US stock financial report data, the financial report data of the major giants was mixed. Among them, the financial report data of Microsoft, Apple, Tesla, and Google exceeded market expectations, and stock prices also showed a rising performance. However, on the other hand, including Meta Platforms, Netflix, PayPal earnings data are slightly inferior, as a barometer of corporate operations, the stock price has also seen a sharp decline.

As a US stock technology giant Meta Platforms, the recently disclosed financial report data is relatively flat, Q4 net profit fell 8% year-on-year, Q4 revenue slightly higher than market expectations. However, from the data disclosed by Meta Platforms, there are two sets of data that have caused concern in the market, on the one hand, the DAU and MAU of Q4 are not as expected by the market, and the market is worried that Meta Platforms will have the risk of peaking user growth; on the other hand, the first quarter revenue performance of Meta Platforms is less than the market expectations. Taking revenue as an example, the market expects $30.25 billion, but Meta Platforms expects first-quarter revenue to be only $27 billion to $29 billion.

Affected by this, Meta Platforms after-hours stock price plunged nearly 23%, as a huge company with a market value of $900 billion, such an irrational decline is easy to trigger the market's worries. Under the influence of the after-hours sharp decline of Meta Platforms, the NASDAQ 100 ETF index fell 2.26% after hours, while giants such as Apple, Microsoft, Google and Tesla also showed different degrees of decline.

Meta Platforms plunged nearly 23 percent after hours, a level that really jumped out of market expectations. However, even according to The Performance Guidance of Meta Platforms for first-quarter revenue, the worst-case scenario is only a decline of about 10%, and Meta Platforms has previously released relevant signals to the market, so the after-hours stock price analysis after the release of Meta Platforms earnings does have the meaning of wrongful killing.

User growth peaked and the first quarter revenue performance guidance was soft, which became the trigger for the decline in Meta Platforms' stock price. However, what worries the market more is that Meta Platforms is facing the impact of Apple's privacy policy on antitrust on the one hand, and may have a more or less impact on the follow-up; on the other hand, it is the impact from TikTok and YouTube. Among them, as a very hot TikTok in recent years, the user scale is in a rapid growth trend, and compared with Facebook's acquaintance social model, TikTok's stranger social model is more likely to produce greater business value, and in the long run, TikTok has gradually become Facebook's main competitor.

Behind Facebook's renaming of Meta Platforms, there are both considerations of deep layout of the metaverse and hope to take the lead in sharing the development results of the metaverse; as well as the continuous pinch consideration of Facebook's user growth peak and TikTok and YouTube, Meta Platforms is trying to find a new profit breakthrough to meet the needs of sustainable development of enterprises.

The renaming of Meta Platforms reflects the determination of companies to participate deeply in the metaverse and may see the metacosm as the main line of development for a long time to come. However, from the analysis of the current development of the metaverse in the global market, our exploration of the metacosm is still in its infancy, and there is still a long way to go before the commercial operation of maturity.

Since Meta Platforms is determined to deeply lay out the metaverse, it will definitely need to invest a lot of manpower and money for a comprehensive layout, and without long-term and large R&D investment, the metacosm can only stay at the conceptual level. Once humans acquire the commercial code of the metaverse, it will have huge economic benefits for those enterprises that laid out the metaverse deeply in the early days.

The weaker financial data and weaker first-quarter performance guidance led to a sharp drop in Meta Platforms' after-hours stock price. However, after this big fall, the valuation of Meta Platforms has been lower than Tencent, and is it undervalued for technology giants below 20 times?

Compared with Tencent, Meta Platforms has users all over the world, as the king of global traffic, Meta Platforms needs to create a more in-depth and influential business model, and needs to gradually get rid of the past model of relying heavily on advertising revenue.

Although Meta Platforms still occupies the position of the global traffic king, TikTok has a lot of staying power, and acquaintance socialization and stranger socialization belong to two different models, from the perspective of commercialization, the commercial space that strangers can tap into may be more imaginative.

Fortunately, Meta Platforms has a low debt ratio and has sufficient cash flow, so it also leaves a lot of room for the subsequent development of Meta Platforms.

In recent years, the valuation level of Meta Platforms has been consistently low, and most of the time it is at the TTM price-to-earnings ratio below 30 times. In the context of the Fed's loose monetary model, this valuation is actually conservative. Today, the valuation of Meta Platforms has fallen below 20 times, perhaps because capital can't see the future development of Meta Platforms, or maybe capital thinks that the exploration of metaversmies will be a long process, and it is difficult to see the real commercial model in the short term.