Meta Platforms' (META -2.15%) stock price plunged 23% to its lowest levels since July 2020 after it released its fourth-quarter earnings report on Feb. 2.

Meta's revenue rose 20% year over year to $33.67 billion, which beat expectations by $230 million. However, its operating margin contracted from 46% to 37%, its net income fell 8% to $10.29 billion, and its earnings per share dropped 5% to $3.67 and missed analysts' expectations by $0.16.

Those headline numbers were mixed, but a deeper dive into Meta's earnings report and conference call reveals five waving red flags for its future.

Meta CEO Mark Zuckerberg.

Image source: Meta.

1. Its weak guidance for the first quarter

For the first quarter of 2022, Meta expects its revenue to grow just 3%-11% year over year. It faces a tough comparison against its 48% growth in the first quarter of 2021, but CFO Dave Wehner also admitted the company was facing headwinds in both ad impressions and price growth. Analysts had expected Meta's first-quarter revenue to grow 27% year over year.

2. Apple's iOS update is throttling its growth

Wehner attributed that slowdown to "platform and regulatory changes" for targeted ads, such as Apple's (AAPL 0.86%) privacy changes on iOS.

Wehner warned that Apple's iOS update, which allows its users to opt-out of data-tracking features, could reduce Meta's ad revenue by about $10 billion -- or 7% of its projected revenue -- in fiscal 2022. Therefore, analysts' current forecasts for 19% revenue growth in 2022 could still be too high.

3. Facebook loses users for the first time

Meta's total number of monthly active people (MAP) across all of its platforms (Facebook, Messenger, Instagram, and WhatsApp) increased 9% year over year to 3.59 billion during the fourth quarter.

Within that total, Facebook's monthly active users (MAUs) grew 4% to 2.91 billion, and its daily active users (DAUs) rose 5% to 1.93 billion. However, Facebook's DAUs also declined by about half a million from the third quarter, marking the namesake platform's first sequential loss of DAUs.

Facebook gained DAUs in Europe and Asia sequentially, but that growth was offset by its loss of DAUs in the US & Canada and the Rest of World regions. Meta attributed that decline to tough comparisons to pandemic-related tailwinds in previous periods, difficulties in India related to higher mobile data rates, and competition from platforms that target younger audiences.

4. Zuckerberg admits that TikTok is a problem

One of those competitors is ByteDance's TikTok, which Meta is aggressively chasing with Instagram's Reels. According to Piper Sandler's latest "Taking Stock with Teens" survey, a mere 22% of U.S. teens chose Instagram as their favorite social media app, putting it in third place behind Snap's (SNAP -4.49%) Snapchat (35%) and TikTok (30%).

During the conference call, CEO Mark Zuckerberg admitted that "apps like TikTok are growing very quickly," and that Meta would need to strengthen its short video services -- specifically Instagram Reels and its short videos on Facebook -- to remain competitive. However, Zuckerberg expects that strategy to throttle its near-term ad impressions because videos are "slower to monetize."

5. Its metaverse business is still a money pit

Meta finally broke out its Reality Labs revenue, which includes its virtual and augmented reality products, for the first time in the fourth quarter.

The segment's revenue doubled to $2.23 billion for the full year as it sold more Quest 2 headsets, but its net loss also widened from $6.62 billion to $10.19 billion -- so it burned nearly six dollars for each dollar of revenue. Those losses will continue to widen as Meta expands its VR and AR businesses.

That pressure would be acceptable if Meta's higher-margin advertising business were still firing on all cylinders. But that profit engine is now losing its steam and pricing power, which makes Meta's costly metaverse efforts -- which reduced its full-year operating profit by 18% while only generating 2% of its revenue -- look like a bright red flag for its margins.

Is Meta's stock still worth buying?

Meta's post-earnings plunge has reduced its forward price-to-earnings ratio to 18. That multiple might rise if analysts reduce their earnings forecasts for 2022, but Meta still looks undervalued relative to its FAANG peers.

Meta's fourth-quarter report and guidance were disappointing, but it certainly isn't the next MySpace yet. Its ecosystem still covers nearly half of the world's population, and it will remain one of the largest digital advertising platforms for the foreseeable future. Its near-term growth will be bumpy, but I believe Meta will weather this downturn -- as it did many others -- and reward investors who accumulate some shares after this violent sell-off.