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Social media behemoth Meta Platforms Inc (NASDAQ:META) is due to present its fourth-quarter results this Wednesday after market close.
The consensus stands for EPS of $2.26 on revenue of $31.53 billion. For its last quarter, Meta reported EPS of $1.64 on revenue of $27.71B, which compared to the Street expectations for EPS of $1.93 on sales of $27.44B. For Q4, Meta guided to revenues in the $30-$32.5B range.
As is the case with other tech stocks, the last couple of weeks were positive for Meta shares. META stock has managed to secure the first daily close above the $150 handle since September 2022 after rallying over 70% since early November.
META shares boosted by WSJ report
Meta Platforms stock gained last week after the Wall Street Journal reported on Friday that the social media company is finally “starting to see a path to recovery” from the tumble in advertising revenue.
The company has reportedly improved its ad-targeting systems as it still works to overcome issues pertaining to Apple’s iOS privacy changes.
“Year on year, they are a tailwind to our business because of improvements we’ve made on artificial intelligence,” META’s Chief Marketing Officer and Vice President of Analytics Alex Schultz reportedly said in an internal meeting.
He also added that the privacy change “will no longer be a drag on earnings going forward,” helping Meta shares to trade higher into this week’s earnings.
What are analysts expecting from Meta Platforms?
Credit Suisse analysts (raised PT to $180 from $145): “We maintain our Outperform rating on the following updated thesis points: potential for positive operating margin and FCF growth inflection starting in 3Q23 and accelerating thereafter, potential for better-than-expected ad revenue growth given increased monetization of Instagram and other properties, as well as Reels and optionality for Reality Labs investments to moderate as Meta unlocks greater efficiencies.”
Bank of America analysts: “Our channel checks and eCommerce data suggest that 4Q’22 ad spend remained soft, though Meta may have benefitted from intra-quarter FX & Twitter share shift. 1Q checks suggest mixed spend for clients (some down, some up) but seemingly less downside risk of a big slowdown in 1H digital ad spending…For 1Q we are now in-line with Street at $27bn in revenue.”
Jefferies’ analysts (raises PT to $175 from $155): “We are positive on the Q4 set-up given 1) better-than-expected ad checks and lessening FX headwinds should lead to a rev beat 2) Street Q1 rev ests look conservative already assuming a -3% y/y decline 3) a reduction in the FY23 expense guide should lead to positive EPS revisions. Our analysis indicates that if 2023 total expenses are ~$4B below our base case there is ~20% EPS upside. Our bull case $10 EPS in FY23 at a high teen multiple yields a $175+ stock.”
Meta Platforms’ stock price closed at $151.74 on Friday after gaining 8.88% last week.
