Shares of Meta plunged 24.5% Thursday as investors and analysts digested the company’s third-quarter earnings miss and a weak fourth-quarter outlook. Shares closed at $97.94, the lowest price since 2016.

The parent company of Facebook reported quarterly revenue of $27.7 billion Wednesday, a decline of more than 4% year over year and its second straight quarterly decline. Its profit plummeted 52% to $4.4 billion.

Meta warned the fourth quarter would be more of the same, issuing a weaker-than-expected outlook. It’s expecting revenue for the fourth quarter to be $30 billion to $32.5 billion. Analysts were expecting sales of $32.2 billion.

Meta CEO Mark Zuckerberg reiterated his commitment to spending billions of dollars developing the metaverse. Meta’s Reality Labs unit, which is responsible for developing the virtual reality and related augmented reality technology that underpins its plans for the metaverse, has lost $9.4 billion so far this year.

Morgan Stanley downgraded the stock Thursday, citing higher spending. Analyst Brian Nowak slashed his price target to $105 from $205. He expects the company’s issues to persist as Meta continues to increase spending to build out its AI capabilities.

Cowen’s John Blackledge also downgraded Meta to market perform from outperform, and lowered his price target to $135 from $205 prior, citing the higher trajectory of operating and capital expenses. KeyBanc’s Justin Patterson lowered his rating on the stock to sector weight from overweight, also citing the rising costs.

Since the start of the year, Meta shares are down by more than 61%. It’s been hurt by competition from rivals such as TikTok, plus a broad slowdown in online ad spending and challenges from Apple’s iOS privacy update.

— CNBC’s Michael Bloom contributed to this report.

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