Meta Platforms META prepares to unveil its Q1 2024 earnings on April 24.
Anticipation surrounds the company’s forecasted total revenues ranging from $34.5 billion to $37 billion for the first quarter of 2024.
The Zacks Consensus Estimate for Q1 revenues is currently at $36.22 billion, a 26.46% surge from the corresponding period last year.
Earnings per share are estimated at $4.32, up by 1.17% in the past 30 days and predicting a remarkable 63.64% growth from the previous year.
Notably, Meta surpassed the Zacks Consensus Estimate in all the past four quarters, with an average surprise of 19.71%.
Examining Meta Platforms, Inc. Price and EPS Dynamics
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote
Let’s delve into the factors shaping the forthcoming financial revelation.
Key Factors at Play
Meta’s Q1 performance is expected to benefit from Facebook’s ever-growing user base, which now surpasses 3.065 billion monthly active users, and the rising popularity of reels. The increased engagement across Meta’s umbrella of services including Instagram, WhatsApp, Messenger, and Facebook is a primary growth stimulant.
The integration of Artificial Intelligence (AI) has been pivotal in enhancing user engagement. AI-powered feed recommendations have notably contributed to this trend.
Reels, in particular, have been a significant driver of growth for Instagram. Meta’s focus on expanding Reels within its video services portfolio, accounting for over half of user time spent on Facebook and Instagram, has been paramount.
Meta has been employing gen AI to enhance user experience across its platforms by introducing AI stickers, AI-based editing tools, the advanced conversational assistant Meta AI, and other features to boost engagement.
Efforts are underway to incorporate gen AI in aiding creators with creating diverse captions and thumbnails. Additionally, Meta is introducing Reels into Meta AI chats and exploring ways to enhance the user experience on Facebook using Meta AI.
The surge in engagement levels is notably contributing to stable user growth across all regions, with a particular emphasis on the Asia Pacific market.
The Zacks Consensus Estimate for Asia Pacific Daily Active Users (DAUs) in Q1 stands at 926 million, indicating a 6.07% year-over-year growth. Similarly, the consensus estimate for the Rest of the World projects a 5% increase to 690 million DAUs.
Regarding Monthly Active Users (MAUs), the Zacks Consensus Estimate for Asia Pacific is at 1.376 billion, signifying a 4% year-over-year growth. The corresponding projection for the Rest of the World’s MAUs anticipates a 4% increase to 1.025 billion MAUs.
On a global scale, the Zacks Consensus Estimate for Meta’s worldwide DAUs is set at 2.13 billion, reflecting a 4.57% year-over-year growth. The consensus forecast for worldwide MAUs stands at 3.087 billion, showing a 3.3% increase from the previous year.
However, Meta’s revenue figures are expected to bear the brunt of the challenging macroeconomic conditions and persistent inflation which potentially constrained ad budgets. This economic backdrop likely dampened ad revenues for the quarter under review.
Notably, in Q4 2023, ad revenues constituted 96.5% of Meta’s total revenues, with a 23.8% year-over-year increase to $38.71 billion.
The Zacks Consensus Estimate for Q1 2024 ad revenues is projected at $35.59 billion, marking a 26.6% year-over-year growth.
Insights from our Model
According to the Zacks model, a favorable Earnings ESP coupled with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) elevates the likelihood of an earnings beat. This combination is notably observed in Meta’s case.
Meta possesses an Earnings ESP of +0.62% and currently holds a Zacks Rank #2. Explore top stocks to trade before their earnings with our Earnings ESP Filter.
Other Potential Stocks to Watch
Consider these alternate stocks which have shown a promising blend of elements that could lead to earning surprises in their imminent releases:
Vertiv VRT indicates an Earnings ESP of +1.24% along with a Zacks Rank #1. Review the full rundown of Zacks #1 Rank stocks today.
Vertiv stocks have soared by 68.7% year-to-date and are scheduled to disclose their Q1 2024 earnings on April 24.
Itron ITRI showcases an Earnings ESP of +5.88% and currently holds a Zacks Rank #2.
Itron stocks have witnessed a year-to-date growth of 19.8% and are slated to reveal their Q1 2024 results on May 2.
Silicon Motion Technology SIMO boasts an Earnings ESP of +5.96% and sustains a Zacks Rank #2 at present.
With a 19.6% year-to-date increase, Silicon Motion stocks are arranged to divulge their Q1 2024 earnings on May 2.
Keep abreast of impending earnings disclosures using the Zacks Earnings Calendar.
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Views expressed in this article represent the author’s personal opinions and not necessarily those of Nasdaq, Inc.
