Meta Platforms' (NASDAQ: META) stock has advanced nearly 50% so far this year as investors focused on its cheap valuation and cost-cutting efforts instead of the sluggish growth of its advertising business. The social media giant still looks cheap at 19 times forward earnings, and analysts expect its earnings per share to rise 11% this year as it reins in its spending and buys back more shares.

However, Meta still needs to stabilize its advertising business, update its algorithms to cope with Apple's privacy changes on iOS, counter ByteDance's TikTok with Reels, and show that its Reality Labs segment -- which houses its virtual and augmented reality products -- can expand and justify its billions of dollars in operating losses each year. It's unclear if Meta can check all those boxes in 2023, but four red flags suggest the tech giant is still struggling to adapt to this tougher market.

Image source: Meta Platforms.

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Source Fool.com