Meta Platforms (formerly known as Facebook) has seen its stock gain 28% year-to-date, outperforming the S&P 500 index. The company is set to report its fiscal Q2 2024 results on July 31, 2024, and is expected to exceed consensus estimates for both revenues and earnings. In the previous quarter, Meta Platforms saw a 27% year-over-year increase in revenues to $36.5 billion, with key metrics such as family daily active people, ad impressions, and average price per ad also showing improvement. Analysts expect this positive trend to continue in the second quarter.
Despite experiencing significant gains in its stock price, Meta Platforms has had a volatile performance, with returns of 23% in 2021, -64% in 2022, and 194% in 2023. This contrasts with the S&P 500’s performance of 27% in 2021, -19% in 2022, and 24% in 2023. The Trefis High Quality Portfolio, comprised of 30 stocks, has consistently outperformed the S&P 500, indicating that individual stocks such as Meta Platforms have struggled to consistently beat the benchmark index. With the current uncertain macroeconomic environment, the question remains whether Meta Platforms will underperform the S&P 500 in the next 12 months or experience a strong jump in its stock price.
Trefis forecasts Meta Platforms’ valuation to be $509 per share, which is 12% above the current market price of around $453. The company’s revenues are expected to exceed expectations, with estimates indicating revenue growth to reach $159.6 billion in FY2024. Additionally, Meta Platforms’ earnings per share (EPS) for Q2 2024 are projected to be $4.75 according to Trefis analysis, slightly higher than the consensus estimate of $4.72. The company’s net income grew 69% year-over-year to $39.1 billion in FY 2023, driven by revenue growth and lower expenses as a percentage of revenues.
Meta Platforms’ stock price estimate is 12% above the current market price, based on a GAAP EPS estimate of around $20.05 and a price-to-earnings (P/E) multiple of just above 25x in fiscal 2024. This valuation reflects the company’s strong financial performance and growth potential. Overall, Meta Platforms is poised to deliver strong results in the second quarter of fiscal 2024, building on its previous successes in revenue growth and earnings. Investors will be closely watching the company’s upcoming earnings report to assess its performance and future prospects in the evolving digital landscape.
