Meta Platforms (META) releases its latest earnings on Wednesday after market hours, and we look at the outlook for the shares.
META – Weekly Chart
META stock has rallied from lows under the $100 level and found resistance at the $150 price level. The stock needs to get above $154 to mount a further rally.
Meta stock fell on Wednesday after poor Snap social media app earnings. Snap said revenue for the three months ending in December was up just 0.1% from last year at $1.3 billion, marking the slowest growth rate since the company went public in 2017.
“Advertising demand hasn’t really improved, but it hasn’t gotten significantly worse, either,” said Snap CEO Evan Spiegel. Advertising is the driver for Meta earnings and will add a headwind to the company’s price outlook for the earnings release.
Slower advertising spending will continue to be a problem, as “digital advertising remains under pressure with some signs of stabilisation,” Wedbush analyst Dan Ives said in a note to investors this week.
Meta reduced its headcount by 11,000 in November, and more jobs are reportedly set to be axed. The company is defending its proposed acquisition of VR developer Within with the antitrust commission. The $440 million deal was announced in October 2021, just a day after the company’s rebranding from Facebook.
Meta CTO Andrew Bosworth said of Within that “if this deal doesn’t close in a timely manner, we’ll probably just walk away.”
Analysts expect Meta Platforms to report a 6.5% fall in revenue for the latest quarter to December when it reports results later on Wednesday, for a third consecutive quarter of decline. Credit Suisse analyst Stephen Ju maintained an outperform rating on Meta with a price target of $180, suggesting a 21% upside on the bull case.
