All eyes are on Meta Platforms as it prepares to release its third-quarter earnings report on Wednesday after the market closes. Investors are eagerly waiting to assess the current state of the digital advertising market through Meta’s results.
Meta, which has experienced significant stock gains and is one of the top-performing mega-cap tech giants this year, has a lot at stake. With year-to-date share increases of 161% and a staggering 256% surge from 52-week lows, the company’s performance will be closely scrutinized.
According to Bloomberg data, here are the forecasts for Meta’s financials:
– Revenue: $33.52 billion
– Adjusted earnings per share: $3.70 per share
– GAAP earnings per share: $3.59
– Gross margin: 80.7%
Investors will also be paying attention to Meta’s post-earnings commentary on various topics, including artificial intelligence, sales expectations for new products like the Quest 3 and Ray-Ban Meta smartglasses, and cost-saving initiatives focused on efficiency.
Analysts have expressed their expectations and thoughts ahead of the report:
UBS has noted that Meta’s short-form video product, Reels, is outperforming rival TikTok, with lower CPMs (cost per thousand impressions) and improved engagement. During the conference call, UBS hopes to receive updates on long-term spending plans, revenue projections for newer products, and the monetization timeline for generative AI chatbots. UBS rates Meta as a “Buy” with a price target of $415, implying a 32% potential upside.
Morningstar is interested in Meta’s commitment to cost-cutting and operational efficiency. The research firm expects management to discuss future plans for the metaverse and the integration of artificial intelligence within it. Morningstar rates Meta with a 3-star rating and a fair value estimate of $311, indicating a potential downside of 1%.
Goldman Sachs believes that Meta’s revenue growth is on a re-acceleration trajectory and views the stock as inexpensive. They commend management for aligning the cost base with earnings growth while investing in long-term initiatives like AI and the metaverse. Goldman Sachs rates Meta as a “Buy” with a price target of $384, implying a 22% potential upside.
JPMorgan predicts that Meta will exceed revenue and profit expectations due to solid advertising revenues. They highlight the positive results from ad checks and anticipate strong performance from Meta-specific initiatives such as Advantage+, Reels, and Click-to-Message ads. JPMorgan rates Meta as “Overweight” with a price target of $324, suggesting a potential upside of 3%.
Bank of America expects Meta’s solid fourth-quarter guidance and insights on Reels to further boost the company’s stock. They believe Meta is benefitting from an improving digital ad market, increasing monetization of Reels, and enhanced AI-driven ad measurement. Bank of America rates Meta as a “Buy” with a price target of $375, indicating a potential upside of 19%.
With the anticipation surrounding Meta’s earnings report, investors and analysts alike are eager to gain insights into the company’s performance, particularly in relation to its competition, new product launches, and cost-saving measures. The market will be watching with great interest as Meta unveils its financial results and shares its plans for future growth.
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