Meta Earnings: Zuckerberg Will Need More Than Efficiency to Justify Parabolic Rise
In late 2022, I participated in a challenge where I was asked to predict the best-performing stock for 2023. I chose Meta Platforms (NASDAQ:META) due to the substantial discount at which the stock was trading at the time.
It was priced at around $125 per share. I had a position in the stock, although I later closed my position.
Fast forward almost a year, and the stock has zoomed 160% YTD as traders bought into Zuckerberg's year of efficiency narrative.
While it remains uncertain whether my pick will win the challenge, it's clear that the stock made sense at those prices, just like many other stocks back then. The main issues driving the negative sentiment around it were:
As I often emphasize, the market's perception is driven by the prevailing narrative. Interestingly, the same issues that concerned investors at $125 per share seem to have faded into the background as the stock now trades at over $300.
Tomorrow, the quarterly earnings call will take place, and in this piece, we will delve deep into the market expectations using insights from InvestingPro.
Earnings for this quarter are anticipated to be $3.61, a significant increase from the $1.64 reported in October 2022 (a period when, incidentally, the stock hit its lowest point).
Revenue is also expected to rebound, reaching $33.4 billion, compared to $27.7 billion in the same period in 2022.
Source: InvestingPro
Key metrics to monitor include:
Currently, the fair value appears to be around $360, as per InvestingPro's analysis. This suggests a potential upside of approximately 15%. However, it's worth noting that this leaves little room for significant discounts.
Source: InvestingPro
In terms of valuation multiples, according to InvestingPro, the stock is currently
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