Meta Platforms Faces Mixed Trends Ahead of Upcoming Earnings Report

Meta Platforms (META) closed at $625.66 in the latest trading session, reflecting a -0.36% change from the previous day. This performance fell short of the S&P 500’s 0.55% gain, while the Dow Jones Industrial Average increased by 0.52% and the tech-heavy Nasdaq rose by 0.7%.

As of now, shares of the social media giant have declined by 11.81% over the past month. During the same period, the Computer and Technology sector lost 8.51%, while the S&P 500 experienced a loss of 5.56%.

Upcoming Earnings Expectations

Analysts and investors are closely watching Meta Platforms as it gears up for its forthcoming earnings disclosure. The consensus estimates predict an earnings per share (EPS) of $5.60, marking an impressive 18.9% rise from the same quarter last year. Revenue is expected to reach $41.43 billion, which represents a 13.64% increase compared to the previous year’s quarter.

META’s full-year Zacks Consensus Estimates project earnings of $26.70 per share and revenue of $188.8 billion. If achieved, these figures would indicate year-over-year growth of 11.9% for earnings and 14.77% for revenue.

Analyst Projections and Stock Performance

Investors should pay attention to recent adjustments in analyst projections for Meta Platforms, as these changes often signal shifts in short-term business trends. Positive revisions reflect rising optimism about the company’s profitability.

Research indicates a direct link between estimate revisions and stock price movements. To leverage this insight, we utilize the Zacks Rank system, which provides a clear and actionable rating model based on these estimate changes.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It boasts a strong, outside-audited track record, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate for Meta has increased by 0.12%, currently placing the company at a Zacks Rank of #3 (Hold).

Valuation Metrics

In terms of valuation, Meta Platforms has a Forward P/E ratio of 23.52, which is lower than the industry average Forward P/E of 25.9. Additionally, the company has a PEG ratio of 1.28, a useful indicator that factors in expected earnings growth rates. By comparison, the Internet – Software sector currently has an average PEG ratio of 2.11.

Industry Rankings and Performance

The Internet – Software industry falls within the broader Computer and Technology sector. With its current Zacks Industry Rank of 87, this industry is situated in the top 35% of over 250 industry classifications.

The strength of individual industry groups is evaluated using the Zacks Industry Rank, which is calculated based on the average Zacks Rank of stocks within these categories. Historical data shows that industries in the top 50% outperform those in the bottom half by a factor of 2 to 1.

For more Stock-moving metrics and insights, visit Zacks.com in the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.