Meta Platforms Stock (META) Hits 52-Week Low. Why It Could Get Worse From Here

The stock of Meta Platforms (META) is down 8% and trading at a 52-week low on March 26 after the social media company lost several high-profile legal cases.

In mid-afternoon trading, META stock was changing hands at $547.75, down more than 30% from its 52-week high of just under $800. The company’s shares are sinking after it lost multiple legal cases related to its social media platforms that include Instagram and Facebook.

In California, a jury found that Meta’s social media platforms were negligent and failed to warn users of the dangers associated with using them, mainly that they’re addictive. In New Mexico, a jury found that Meta was liable for failing to properly safeguard its apps from online predators who target children and ordered the company to pay $375 million in damages.

Meta’s ‘Big Tobacco’ Moment

Analysts and legal experts say the jury verdicts against Meta Platforms are precedent setting and could have major repercussions across the social media landscape and for the company’s future. Meta faces several similar lawsuits in the U.S., as well as in other jurisdictions such as Canada and the United Kingdom.

The lawsuits in California and New Mexico are being likened to the Big Tobacco lawsuits that occurred in the 1990s. In both cases, technology and tobacco companies were found to have lied to the public about the safety and potential harms of their products. The tobacco cases led to a flood of class-action lawsuits that cost billions of dollars to resolve. They also resulted in public warnings about the harms of smoking.

Is META Stock a Buy?

The stock of Meta Platforms has a consensus Strong Buy rating among 45 Wall Street analysts. That rating is based on 40 Buy and five Hold recommendations issued in the last three months. The average META price target of $865.58 implies 58.28% upside from current levels.