Meta Platforms Inc. News:
Meta Platforms Inc., formerly known as Facebook, reported a strong performance and exciting opportunities ahead during its Q1 2023 earnings conference call, held on Thursday. CEO Mark Zuckerberg and CFO Susan Li discussed the company’s focus on artificial intelligence (AI) and its commitment to building the metaverse, Meta’s vision for a virtual shared space where users can interact with each other and digital objects seamlessly. Meta’s AI work is already driving strong engagement growth and monetization efficiency, particularly in its Reels feature, which has seen a 24% increase in time spent on Instagram since its launch.
The company’s revenue increased by 3% to $28.6 billion, while expenses rose by 10% to $21.4 billion YoY. Facebook’s Family of Apps segment reported total revenue of $28.3 billion, up 4% YoY, with ad revenue accounting for $28.1 billion, up 4% YoY or 7% on a constant currency basis. The company’s online commerce vertical was the largest contributor to year-over-year growth, followed by healthcare and entertainment & media.
Facebook’s Reality Labs segment had Q1 revenue of $339 million, down 51% YoY due to lower Quest 2 sales. The segment’s expenses were $4.3 billion, up 18% YoY primarily due to employee-related costs and restructuring charges. Reality Labs’ operating loss was $4.0 billion.
Meta Platforms Inc. is focusing on innovation through AI and the metaverse while also improving its efficiency and financial performance. The company has over three billion daily users across its various apps, with 200 million daily active users in the US and Canada alone. Meta has already reached several milestones in building the metaverse, including over a billion Meta avatars created and more than half of Quest daily actives spending over an hour on their device. Meta is also gearing up to launch its next-generation consumer virtual and mixed reality device later this year.
Meta Platforms Stock Analysis:
Based on the Meta Platforms Inc. (META:NSD) stock forecast from 59 analysts, the average analyst target price for Meta Platforms Inc. is USD 210.59 over the next 12 months. Meta Platforms Inc.’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Meta Platforms Inc. is Slightly Bullish, which is based on 8 positive signals and 6 negative signals. At the last closing, Meta Platforms Inc.’s stock price was USD 238.56. Meta Platforms Inc.’s stock price has changed by +25.49% over the past week, +35.72% over the past month and +0.00% over the last year.
While the company has shown top-quartile revenue growth in the previous five years compared to its sector, investors should proceed with caution as the stock is trading high compared to its peers on a price to earnings, book value, cash flow, and free cash flow basis. Additionally, the company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged.
