Meta Platforms Inc (NASDAQ: META) made a four-year low on Tuesday after announcing its new $1,499 Quest Pro virtual reality headset.
Reason for the muted response
That translates to about $1,100 more than the Quest 2.
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The new device, slated to start shipping on October 25th, is equipped with superior graphics, thanks to the more advanced Snapdragon XR2+ chip, and enables mixed reality features – the nucleus of the “metaverse”.
It also comes with new lenses and improved sensors to better track movement. Still, that price point at a time when the consumer is cutting back on discretionary/luxury spending sure is an interesting bet that’s yet to unravel.
That’s probably why the announcement received a muted response from the investors.
Also on Tuesday, Russia added Meta Platforms Inc to its list of terrorist and extremist organisations. The stock is now trading at a price-to-earnings multiple of 10.65.
Atlantic Equities downgrades Meta shares
Meta shares were also hit this morning after James Cordwell (Atlantic Equities) downgraded the stock to “neutral” on rising competition for ad dollars. His note added:
Meta’s growth outlook is increasingly challenged given strengthening macro headwinds. We now believe that Meta Platforms Inc will continue to lose market share and that consensus expectations are too optimistic.
Cordwell significantly trimmed his outlook in terms of profit and revenue the company will generate over the next two years. His projective of $160, though, still represents a 25% upside from here.
Meta Platforms is scheduled to report its quarterly results on October 26th. Last month, it revealed plans of cutting costs by at least 10%. (find out more)
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