Meta Platforms Faces Challenges Ahead of Earnings Report

Meta Platforms (META) concluded the last trading session at $521.52, marking a decrease of -1.87% from the previous day. In comparison, the S&P 500 experienced a smaller dip of 0.17%. The Dow Jones Industrial Average fell by 0.39%, while the tech-centric Nasdaq saw a minimal drop of 0.05%.

Recent Performance Analysis

The shares of Meta have declined by 12.14% over the past month. This underperformance is notable against the Computer and Technology sector, which recorded a loss of 6.26%, and the S&P 500, down 3.94% during the same period.

Anticipating Earnings Results

Looking forward, both analysts and investors are eagerly awaiting Meta’s upcoming earnings disclosure, scheduled for April 30, 2025. Analysts project that Meta will report earnings of $5.22 per share, reflecting a year-over-year growth of 10.83%. The Zacks Consensus Estimate also anticipates revenue to reach $41.27 billion, which would represent a 13.2% increase compared to the same quarter last year.

For the full year, the Zacks Consensus Estimates predict earnings of $24.85 per share and total revenue of $186.33 billion. These figures indicate an increase of +4.15% in earnings and +13.27% in revenue from the previous year.

Importance of Analyst Estimates

Investors should monitor any updates in analyst estimates for Meta, as these adjustments often reflect changing business conditions. When analysts revise their estimates upward, it signals confidence in the company’s operational capabilities and profit generation potential.

Zacks Rank and Stock Performance

Research shows that changes in analyst estimates can significantly impact stock price performance. To help investors, Zacks has developed a ranking system, ranging from #1 (Strong Buy) to #5 (Strong Sell). Historically, stocks rated #1 have yielded an average annual return of +25% since 1988. Currently, Meta holds a Zacks Rank of #3 (Hold), with its Consensus EPS estimate falling 2.96% over the past month.

Valuation Metrics

Valuation remains a key consideration. At present, Meta’s Forward P/E ratio is 21.39, which is lower than the industry average of 25.15. Furthermore, Meta’s PEG ratio stands at 1.19, which considers expected earnings growth alongside the P/E ratio. In contrast, the average PEG ratio within the Internet – Software industry is 1.91.

Industry Context

Meta is categorized within the Computer and Technology sector, specifically the Internet – Software industry, which currently holds a Zacks Industry Rank of 68, placing it in the top 28% of over 250 industries. This rank is based on the average Zacks Rank of companies in this sector, where stronger rankings tend to outperform weaker ones significantly.

Staying Informed

Investors are encouraged to utilize resources like Zacks.com to track stock-moving metrics and market developments in the coming trading sessions.

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Meta Platforms, Inc. (META) : Free Stock Analysis report

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

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