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Why Meta Platforms Stock Is Up Again Today

By Daniel Sparks – Dec 8, 2021 at 12:27PM

Key Points

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The tech stock is having a good week, rebounding from a recent sell-off. But shares are still underperforming the overall market this year.

What happened

Shares of Facebook parent Meta Platforms (META -4.55%) are up nicely on Wednesday, climbing about 3% as of 11:50 a.m. ET. The stock's gain builds on its momentum yesterday, when shares climbed along with the broader market.

Meta Platforms shares are up along with many other tech stocks today. An upbeat day in tech may be due to a growing appetite for tech stocks after many of them have underperformed recently.

A chart showing a stock price rising sharply.

Image source: Getty Images.

So what

Tech stocks generally have more momentum than the overall market today; the tech-heavy Nasdaq Composite is up more than 0.3% and the S&P 500 is trading flat at the time of this writing.

Not only has Facebook stock underperformed the S&P 500 year to date, but it has slid sharply in recent months. Even including the stock's momentum this week, shares are down 13% over the past three months. During this same timeframe, the S&P 500 gained 3.6%. The stock's recent gains suggest investors may believe shares have become undervalued.

Now what

Despite the stock's weakness recently, analysts have bullish expectations for the company's growth. Their consensus forecast calls for full-year revenue of $118 billion in 2021 and then $140 billion in 2022. In addition, analysts are modeling for a 38% increase in Facebook's earnings per share next year. These are bullish expectations for a dominant market leader that trades at just 24 times earnings.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Meta Platforms, Inc. The Motley Fool has a disclosure policy.

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