9 months ago
63 Facebook CEO Mark Zuckerberg astatine the F8 Facebook Developers league connected April 30, 2019 successful San Jose, California.
Justin Sullivan | Getty Images
Meta shares surged much than 4% connected Tuesday, and were trading astatine their highest level since Jan. 2022, a time aft the institution posted stronger-than-expected results for the 2nd 4th and gave guidance for the existent play that topped analysts' estimates.
The institution connected Wednesday reported net per stock of $2.98, which was higher than the $2.91 per stock expected by a survey of Refinitiv analysts. Revenue jumped 11% twelvemonth implicit twelvemonth to $32 billion, surpassing the $31.12 cardinal mean expert estimate, according to Refinitiv.
For the 3rd quarter, the Facebook genitor institution forecast gross of $32 cardinal to $34.5 billion. That's supra the $31.3 cardinal that analysts were expecting.
The results bespeak a rebound successful online advertising, arsenic good arsenic signs that Meta CEO Mark Zuckerberg's "year of efficiency," oregon absorption connected cutting costs and improving profitability, is paying off.
"While determination were immoderate mixed narratives (both qualitative and quantitative) astir opex/capex successful 2023/2024, our presumption is that management's 'year of efficiency' taxable continues to thrust a sustained mentality displacement wrong the institution – portion semipermanent investments down cardinal objectives stay a absorption country (in presumption of infrastructure & talent), we expect absorption to proceed to equilibrium driving maturation and accrued returns," Goldman Sachs expert Eric Sheridan, who maintains a bargain standing connected Meta shares, wrote successful a Thursday note.
Other analysts cheered the results, pointing to beardown engagement, rising monetization of its TikTok rival Reels, arsenic good arsenic instrumentality connected investments successful artificial intelligence, arsenic agleam spots successful the report.
Bank of America expert Justin Post upped his terms people connected Meta shares to $375 from $350 and reiterated his bargain standing connected the stock.
"Meta is hitting its stride again with a renovated tech stack and Reels strategy, gaining stock successful the industry," Post wrote successful a Thursday report.
Still, Post and different analysts expressed uncertainty astir Meta's investments successful the metaverse, arsenic signaled by growing losses successful the company's Reality Labs unit. The part posted an operating nonaccomplishment of $3.7 cardinal during the 2nd quarter, and Meta warned that it expects Reality Labs' operating losses to proceed this year, arsenic good arsenic "increase meaningfully" successful 2024.
CNBC's Michael Bloom contributed to this report.
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