Shares of social media giant Meta Platforms (META) slipped in after-hours trading after reporting earnings for its third quarter of Fiscal Year 2024. Adjusted earnings per share came in at $6.03, which beat analysts’ consensus estimate of $5.22 per share.
In addition, sales increased by 19% year-over-year, with revenue hitting $40.59 billion. This also beat analysts’ expectations of $40.21 billion and was driven by a 7% increase in ad impressions, along with an 11% increase in average price per ad.
Turning to the company’s user base, family daily active people, which is defined as users who visited at least one of the company’s apps, averaged 3.29 billion in September 2024, a 5% year-over-year increase.
Interestingly, investors could have anticipated the solid year-over-year growth by simply looking at Meta’s website traffic. As the image below shows, the total estimated visits rose by 2.26% when compared to the same quarter of last year. However, it is interesting to note that the next quarter’s figures may actually slow down on a year-over-year basis, as the greenish-blue line has crossed below the grey line.
META’s 2024 Outlook
Looking forward, management has provided the following outlook for the remainder of 2024:
- Q4 revenue of between $45 billion and $48 billion versus analysts’ estimates of $46.24 billion
- FY expenses of between $96 billion and $98 billion
- FY capital expenditures in the range of $38 billion to $40 billion
As we can see, the company’s outlook and earnings results were better than expected, but the stock still fell. The reason for this could be that a beat was already priced in as shares rallied into earnings, which likely resulted in a “sell-the-news” event.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 42 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 97% rally in its share price over the past year, the average META price target of $628.77 per share implies 6% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
