Meta Platforms (NASDAQ: META), formerly Facebook, is set to release its Q4 2022 earnings report after the market closes tomorrow. This article provides a concise overview of what investors should know ahead of the announcement.
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Last quarter, Meta exceeded revenue expectations, posting $40.59 billion in revenue, an 18.9% year-over-year increase. The company also comfortably surpassed analysts’ EBITDA estimates and reported 3.29 billion daily active users, a 4.8% year-over-year rise.
Q4 2022: Analyst Expectations and Peer Performance
For Q4 2022, analysts project a 17.2% year-over-year revenue growth to $46.99 billion, a deceleration from the 24.7% growth observed in the same quarter of the previous year. Adjusted earnings per share are anticipated to reach $6.74. Analysts have largely maintained their estimates over the past month, indicating confidence in Meta’s performance heading into earnings. Historically, Meta has consistently outperformed Wall Street’s expectations, surpassing revenue estimates by an average of 2% over the last two years.
Within the consumer internet sector, Netflix is the only comparable company to have reported earnings thus far. Netflix exceeded revenue forecasts by 1.4%, achieving a 16% year-on-year sales increase. Following the announcement, Netflix stock rallied 9.4%.
Market Sentiment and Price Target
The consumer internet sector has experienced positive investor sentiment recently, with average share prices rising 5.3% over the past month. During this period, Meta’s stock has climbed 12.1%. The company enters its earnings announcement with an average analyst price target of $670.75, slightly above its current share price of $664.30.
Share buybacks can be a strategic move for companies with substantial cash reserves, provided the share price is favorable.
Conclusion
Meta’s Q4 earnings release will be a crucial event for investors. The company’s ability to navigate a challenging macroeconomic environment and maintain its growth trajectory will be closely scrutinized. While analyst expectations suggest a slowdown in revenue growth, Meta’s history of exceeding forecasts and the positive momentum in the consumer internet sector offer potential upside. The earnings announcement will provide valuable insights into Meta’s future prospects and its position in the competitive landscape.
