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Why Meta Platforms Stock Slid on Tuesday

What happened

Shares of Facebook parent Meta Platforms (NASDAQ: FB) took a hit on Tuesday. At its worst point during the trading day so far, shares were down 3.6%. As of 12:35 p.m. ET, however, the stock was down about 2.6%.

The tech stock's decline is likely driven primarily by a bearish day in the overall market.

Meta Platforms CEO Mark Zuckerberg. Image source: Meta Platforms.

So what

Showing how the market is getting beaten up today, the S&P 500 was down 1.8% at the time of this writing. The tech-heavy Nasdaq Composite, however, had fallen 2.7%.

The sharp drop in the market on Tuesday is a continuation of volatile trading so far in 2022. The Nasdaq Composite has had a rough start to 2022, falling nearly 14% as of this writing. Meta Platforms stock is down nearly 11% during this period.

Some of the market sell-off this year may be related to the Federal Reserve's commentary about expectations to tighten monetary policy with interest rate hikes.

Now what

While high-growth stocks with lofty valuations have been the primary victims in 2022's sell-off, other more conservatively valued stocks like Meta Platforms have been beaten down some as well. Since Meta Platforms' stock may not have necessarily deserved to be lumped in with these securities, a good case can be made for the stock being oversold during this drawdown. Meta Platforms shares' price-to-earnings ratio of just 21 is extremely conservative given the company's recent top-line growth rates and analysts' consensus forecast for earnings per share to average compound annualized growth of about 21% over the next five years.

With such a conservative valuation, investors may want to take a closer look at Meta Platforms stock to see if it's worth investing in.

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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 and recommends Meta Platforms, Inc. The Motley Fool has a disclosure policy.


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