Meta Platforms Faces Market Pressure as Earnings Approach

Market Performance Overview

Meta Platforms (META) ended the latest trading session at $610.72, a drop of 1.16% from the prior day. This decline underperformed against the S&P 500, which closed with a modest gain of 0.16%. Meanwhile, the Dow Jones increased by 0.25%, while the tech-heavy Nasdaq dipped 0.06%.

Upcoming Earnings Report and Projections

Investors are keenly anticipating Meta Platforms’ upcoming earnings report, set for January 29, 2025. Analysts forecast an earnings per share (EPS) of $6.76, reflecting a remarkable 26.83% rise from the same quarter last year. The consensus estimate for revenue stands at $46.98 billion, representing an increase of 17.13% compared to the prior year’s quarter.

Investors should also pay attention to any recent changes in analyst expectations for Meta Platforms. Adjustments in these estimates often indicate current business trends, with positive revisions suggesting an optimistic view of the company’s prospects.

The Value of Estimate Changes

Research indicates that these estimate modifications are linked to stock price movements. To leverage this information effectively, we developed the Zacks Rank, which analyzes these estimate changes and provides an insightful rating system. This system ranks stocks from #1 (Strong Buy) to #5 (Strong Sell) and has consistently outperformed the market, with #1 rated stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate rose by 0.14%, placing Meta Platforms at a Zacks Rank of #2 (Buy).

Valuation Metrics of Meta Platforms

As for valuation, Meta Platforms trades at a Forward P/E ratio of 24.23, which is lower than the industry’s average Forward P/E of 28.07. Its PEG ratio stands at 1.21, a metric that adjusts for expected earnings growth. Comparatively, the average PEG ratio in the Internet – Software industry is 2.1.

Industry Context

The Internet – Software industry is a segment of the broader Computer and Technology sector, currently rated #25 in the Zacks Industry Rank, placing it in the top 10% of over 250 industries. This ranking assesses the strength of various industry groups based on the average Zacks Rank of their constituent stocks. Historical data shows that the top half rated industries outperform the bottom half by a ratio of 2 to 1.

Stay Updated

For ongoing updates on these key market dynamics and more, utilize Zacks.com in the forthcoming trading sessions.

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

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