Let the good times keep on rolling. That appears to be the subtext to Meta Platforms’ (NASDAQ:META) latest quarterly readout. Locking in further gains to the already ample 2023 haul, shares are trending higher in Thursday’s session after the social media giant impressed Wall Street with its Q2 results.
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For the first time since the end of 2021, Meta posted double-digit top-line growth, with revenue climbing 11% year-over-year to $32 billion, in the process outpacing Street expectations by $970 million. At the other end of the scale there was further success, as EPS of $2.98 also beat the forecast – by $0.07.
There were winning metrics elsewhere too. Daily Active Users (DAUs) reached 2.06 billion vs the 2.04 billion anticipated, Monthly Active Users (MAUs) reached 3.03 billion compared to the analysts’ expectation of 3 billion and Average Revenue per User (ARPU) of $10.63 exceeded the consensus estimate of $10.22.
Even better, where so many often stumble, the outlook impressed; Meta guided for Q3 revenue in the range between $32-$34.5 billion, compared to the consensus estimate of $31.11B billion. At the same time, the company reduced its capital expenditures forecast from the prior $30-$33 billion range to between $27-$30 billion.
“We had a good quarter,” was Meta CEO Mark Zuckerberg’s take on the period, a sentiment echoed by Truist analyst Youssef Squali.
“We’re incrementally positive on Meta following better than expected 2Q results and a materially higher 3Q guide, reflecting accelerating growth in the ads business in 2Q and expectations for further acceleration in 3Q,” said the 5-star analyst. “Resilience in user engagement, success with Reels, and growing AI integrations bode well for LT growth as well. As importantly, mgmt’s focus on operating efficiencies is bearing fruit with higher operating margins and lower Capex for FY23, even as META continues to invest in high priority areas including AI, Metaverse and Reels.”
These are not the comments of an analyst who has any doubts, and Squali gives Meta a Buy rating, while lifting his price target from $340 to $390. The new figure makes room for additional gains of ~24% from current levels. (To watch Squali’s track record, click here)
META is getting plenty of love on Wall Street right now. While 2 analysts remain on the sidelines, all 32 other reviews are positive, making the consensus view here a Strong Buy. The shares are currently trading at $316.46 and the $345.52 average price target implies ~9% upside over the one-year timeframe. (See Meta stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
