Meta Platforms long-term fundamentals remained unchanged, says Mizuho

Mizuho says the biggest surprise in Meta Platforms’ Q1 report was not the lower than expected revenue guidance or elevated capital expenditures, it was that the company will be in an investment cycle for the foreseeable future, the analyst tells investors in a research note. The firm says that unlike the prior cycles, Meta’s revenue growth is not eroding, and the company has a track record of monetizing faster than expectations. However, Meta’s operating expenditure flexibility could be limited near-term, but its long-term fundamentals remained unchanged, contends the firm. It recommends “staying the course with the stock being undervalued.” Mizuho keeps a Buy rating on Meta with a $575 price target.