Is Meta a buy amid Facebook controversies and after last week's earnings disaster?
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The release of a devastating earnings report sent Meta Platforms (NASDAQ:FB) spiraling last week, wiping out hundreds of billions of dollars in market value in a single day. With the stock returning to levels last seen in mid-2020, can the former Facebook overcome controversy and growth concerns to present a buying opportunity for investors?
A Bumpy Transition from Facebook to Meta
Early this month, Meta (FB) issued an earnings report that shook the market. The company missed profit expectations with its Q4 earnings, despite revenue that rose 20% from last year to reach $33.7B. The profit squeeze took place as the firm's expenses jumped by 38%.
At the same time, the Big Tech bellwether issued a disappointing forecast for the current quarter. The parent of Facebook predicted Q1 revenues of $27B-$29B, implying up to 11% growth on the high end. However, analysts had a consensus estimate above $30B.
The Mark Zuckerberg-led company announced a name change late last year, amid rising controversy about the social media behemoth's impact on society. The firm faced bad press as a former company insider accused it of putting profits ahead of safety, alleging that the firm allowed toxic content to remain on its platform in order to keep engagement as high as possible.
In the wake of this scandal, the company changed its name from Facebook to Meta, with the stated reason to highlight its major push into the metaverse. This drive also explains some of the firm's stepped-up spending, with FB planning a $10B investment in the metaverse over the course of 12 months.
Following its disappointing earnings report, shares plummeted 26% on Feb. 2 and extended their slide with losses in each of the following three sessions. (The stock finally halted its slide on Wednesday, finishing higher by 5%.) All told, FB lost 32% of its value over the course of four post-earnings sessions, eventually setting a fresh 52-week low of $216.15 -- hitting levels last seen in June of 2020.
Is FB a Buy?
Was the Q4 earnings report a sign of growing pains -- a necessary transitional quarter as the Meta butterfly emerges from the Facebook cocoon? Less metaphorically, has FB become a buy after the post-results washout?
Some prominent investors certainly think so. Bill Miller, founder and CIO of Miller Value Partners, pointed to the company as a value play at these levels, saying it represented a safe buy as the Federal Reserve begins to ramp up interest rates and other tech firms might see their valuations squeezed.
Looking at quantitative measures, Seeking Alpha's Quant Ratings suggest a neutral stance. The company gets an A+ in profitability but only a C for growth. Meanwhile, valuation has improved with the recent sell-off but still only sits at a C- (compared to a D+ three months ago).
Analysts have kept an optimistic long-term view, even amid the recent stumbles. Of the 54 analysts surveyed by Seeking Alpha, 33 maintain a Strong Buy rating on FB. Adding in the eight analysts with a Buy opinion, fully 76% of the Wall Street community has a bullish perspective.

SA contributor Gary Alexander lands on the side of the bulls. Echoing Miller, he characterizes FB as a value stock at these levels. On the other side of the argument, fellow contributor Tristan De Blick has a bearish view, saying that three misconceptions will continue to hurt FB investors in 2022.