Goldman Sachs maintains buy rating on Meta with price target of $555



On Wednesday, Goldman Sachs reiterated a Buy rating on Meta Platforms Inc. (NASDAQ: ), setting a price target of $555.00. The company's assessment follows Meta's first-quarter 2024 earnings report, which was in line with expectations but conservative on its second-quarter revenue outlook. Meta also narrowed its operating expenditures (opex) forecast by raising the lower end of the range and raised capital expenditures (capex) guidance to a new range of $35-40 billion from $30-37 billion, beating market expectations.

Meta's stock price has been on a tear so far this year, rising a whopping 43% ahead of this report, versus the S&P 500's 7% gain. Despite the earnings report, operating margins for the Meta family of apps beat Goldman Sachs forecasts but were slightly below consensus estimates. Additionally, Reality Lab reported a loss of $3.8 billion, below expectations from Goldman Sachs and the broader market.

Meta's quarterly buyback activity was particularly notable, with the company repurchasing $15 billion worth of stock, far exceeding Goldman Sachs' estimate of about $4 billion. This aggressive buyback was a notable financial move for the company during the quarter.

The upcoming earnings call is expected to discuss a variety of topics, including the macroeconomic environment for digital advertising, the impact of regulation on user and advertising trends (particularly in Europe), and Meta's unique revenue dynamics. Discussions may also cover the growth narrative surrounding products such as Reels and messaging services, competitive advantages for global business, and management's views on the development of artificial intelligence and mixed reality. The call is also expected to provide insight into the rationale behind revised operating expenses and capital expenditures guidance.

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Investment Professional Insights

When looking at Meta Platforms Inc.'s (NASDAQ: META ) latest earnings report and market expectations, it's important to consider the key financial metrics that could sway investors' perceptions. With a market capitalization of $1.25 trillion, Meta's valuation is a key factor for investors. The company's current price-to-earnings ratio is 32.46, reflecting investors' views on its future profit potential. Additionally, the trailing 12-month adjusted price-to-earnings ratio as of Q4 2023 was 29.8, indicating a slightly more favorable valuation when normalized earnings are considered.

InvestingPro Tips shows that Meta holds more cash than debt on its balance sheet, providing financial stability and flexibility. Additionally, 11 analysts upgraded earnings for the period ahead, signaling optimism about the company's ability to beat current profit expectations. For investors looking for more in-depth analysis, there are 15 additional InvestingPro tips available, available through a subscription.To enhance your investing strategy, use the coupon code PRONEWS24 Annual or biennial Pro and Pro+ subscriptions receive an additional 10% discount.

Another key metric to consider is the company's revenue growth. Revenue grew by 15.69% in the past 12 months as of the fourth quarter of 2023, with growth of 24.7% in the fourth quarter of 2023, indicating strong sales performance. These numbers are critical for investors to evaluate a company's ability to grow revenue and capitalize on market opportunities. Meta's next earnings release date is April 24, 2024, and investors will be keen to see how these financial insights tie into the company's strategic initiatives and market positioning.

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