Meta Platforms (META) Stock Analysis: Is META Undervalued After Earnings Pullback?

Meta Platforms (META) experienced a recent downside move following a weaker-than-expected earnings report, which revealed higher-than-anticipated spending on artificial intelligence. This led to a sharp sell-off, pushing META stock into oversold territory. However, as investors and traders reassess the company’s long-term outlook, there is growing evidence that Meta may now be undervalued, potentially setting the stage for a price reversal.

Technical Analysis: META Shows Signs of Consolidation

From a technical perspective, META stock rebounded from a key support level on 21 November, moving back into bullish territory. Shortly after, the price retraced slightly after rejecting the upper Bollinger Band, indicating a short-term pullback rather than a full trend reversal.

The Directional Movement Index (DMI) suggests that while the broader trend remains bullish, bullish momentum is currently weak. Meanwhile, the Relative Strength Index (RSI) sits at 49, signalling neutral conditions and suggesting the stock may be entering a consolidation phase following recent volatility.

Fundamental Analysis: Strong Valuation Metrics Support Upside

Despite short-term technical uncertainty, Meta’s fundamentals remain strong. The company currently trades at a P/E ratio of 28.61, indicating fair valuation, while its forward P/E of 21.76 suggests the stock is moving toward being attractively priced.

Based on valuation models and analyst expectations, META could target:

• High price target: $848.43 (31.48% upside)
• Low price target: $746.66 (15.74% upside)

These projections align closely with analyst consensus price targets of $830.73, representing a potential 28.30% upside from current levels.

Q4 Outlook: Seasonal Strength Could Boost META Stock

Looking ahead to Q4, Meta is likely to benefit from seasonal tailwinds. Historically, the company sees increased user engagement and higher advertising demand during this period, which can drive improvements in both revenue and profitability. This seasonal strength may act as a catalyst for higher share prices in the coming months.

Outlook for Traders and Long-Term Investors

For long-term investors, Meta’s strong fundamentals and relatively attractive valuation may present a compelling opportunity, particularly with Q4 performance acting as a potential growth driver. Investors with a time horizon of several months or longer may find META stock appealing at current levels.

For short-term traders, however, ongoing market uncertainty and weakening momentum suggest caution. It may be prudent to wait for clearer confirmation that the recent pullback is merely a temporary correction within a broader bullish trend, rather than the start of a larger reversal.