Facebook parent Meta Platforms Inc. (NASDAQ: META) is transforming its business and gearing up for a battle against Apple Inc. in the emerging mixed-reality space. The social-networking giant, known for its transition into AI and the metaverse, is set to announce its fiscal third-quarter earnings on Wednesday following market close. Analysts anticipate Meta to report robust ad sales, benefiting from the rebound in the advertising market, along with Google’s parent company, Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG).
Key Highlights to Look Out for
Earnings
Industry analysts tracked by FactSet forecast Meta to achieve earnings of $3.64 per share, a significant increase from $1.64 per share reported in the previous year. Estimize, which aggregates projections from various sources including hedge funds and academics, also predicts earnings of $3.64 per share on average.
Revenue
The FactSet consensus estimates Meta’s revenue to reach $33.6 billion, compared to $27.7 billion in the previous year. Contributors to Estimize also anticipate revenue of $33.6 billion.
Stock Movement
Over the past 12 months, Meta’s stock has experienced a remarkable rebound, surging by 143% from its lowest point of $120.34 per share on September 30, 2022. So far this year, Meta’s shares have skyrocketed by 160%. In contrast, the S&P 500 (SPX) has shown a modest increase of 10.6% in 2023.
According to FactSet, out of the 57 analysts covering Meta’s stock, 44 recommend buying, six suggest holding, and only one advises selling. The average price target stands at $368.40.
Key Considerations
CEO Bryan Karas of Playbook Media, a performance-marketing and creative agency, shared his view on Meta’s upcoming report, stating, “Meta’s advertising is becoming increasingly effective, and they have successfully reduced costs. However, I believe market expectations are inflated. While they may meet these expectations, exceeding them as they did last quarter seems unlikely. Meta’s investments in AI have greatly enhanced its targeting capabilities, but there is a limit to the amount brands are willing to pay for bottom-funnel inventory.”