Meta Q1 Preview: Antitrust Issues Make This A Risky Buy At Current Valuations (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Meta is well-positioned to outperform peers in a slowing ads market, with limited exposure to riskier segments and a strong growth track record vs peers.
• I think with each deadline extension for a TikTok ban, the likelihood of Meta enjoying a ~2% step jump up to its TTM revenue base from reduced competition gets slimmer.
• Ongoing antitrust trials can force Meta to sell Instagram and WhatsApp, reducing Meta's competitive standing and ads pricing power. We may be at the cusp of major disruptions.
• To continue being a buyer of META stock, I would demand a meaningful discount valuation. But currently, the stock seems relatively overvalued vs its comps.
• META vs SPX500 chart technicals point bullish but without favorable valuations, I think this is insufficient to justify a 'Buy' ahead of the Q1 FY25 earnings.

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