Facebook parent Meta Platforms maintains bullish sentiment following 1Q earnings beat, analysts say

Sentiment remains bullish for Meta Platforms Inc (NASDAQ:FB) as its focuses on making 2023 a year of efficiency for the company, including slimming down its workforce and increasing expenditure on augmented reality (AR) platform Reality Labs, according to TickMill Group market analyst James Harte.

The owner of social network and messaging services Facebook, Instagram and WhatsApp broke a three-quarter earnings losing streak with the release of its 1Q 2023 financials on Wednesday, Harte said in a note, adding that the breakdown of the numbers “is encouraging for shareholders.”

In terms of headline numbers, Meta posted 1Q earnings per share of $2.20, beating expectations for a $2.02 result, Harte noted. On revenues, it posted $28.6 billion, well above the $27.7 billion the market was looking for.

Monthly active users were in line with estimates at 2.99 billion while average revenue per user was seen much higher at $9.62 versus the $9.30 that was expected.

“As with Alphabet and Microsoft, traders were keen to hear about the company’s AI and AR business,” Harte said.

“Reality Labs, which is responsible for developing Meta’s augmented reality products for the metaverse, recorded a $3.99 billion operating loss,” he added. “Additionally, CEO Mark Zuckerberg said this figure will increase this year as the company pumps more investment into that sector.”

Signs of recovery in its advertising business helped to dispel concerns about the continued relevance of its platforms, commented AJ Bell investment director Russ Mould.

“This, plus the greater efficiency pursued by the business in recent months, is clearly helping to win the market over, although … Zuckerburg’s continued insistence on pursuing his metaverse vision will ring in the ears of some investors like tinnitus.

“Meta also notably flagged its own developments on AI as the tech giants compete for their share of real estate in this nascent market.”

Meta’s shares were up 12% at $209.40 in pre-market trade on Thursday.

Contact the author at stephen.gunnion@proactiveinvestors.com

theinvestornewsletterdaily.com is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of theinvestornewsletterdaily.com are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.

The sender of this email makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.

The content on any of theinvestornewsletterdaily.com websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options.

The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.

Disclaimer: Past performance is no guarantee of future performance. This product is for educational purposes only. Practical application of the products herein are at your own risk and theinvestornewsletterdaily.com, its partners, representatives and employees assume no responsibility or liability for any use or mis-use of the product. Please contact your financial advisor for specific financial advice tailored to your personal circumstances. Any trades shown are hypothetical example and do not represent actual trades. Actual results may differ. Nothing here in constitutes a recommendation respecting the particular security illustrated.