Meta Platforms, the company behind popular social media apps, has released its stellar Q2 2023 earnings report, signaling even more gains for investors. Following an impressive first half of the year, Meta Platforms’ stock price saw a surge, and experts believe it’s not too late to join the ride.
Investors had several burning questions before the earnings report. Would CEO Mark Zuckerberg‘s cost-cutting plan be effective? Are people still using Meta Platforms’ apps in significant numbers? And most importantly, is Zuckerberg optimistic about the current quarter? Fortunately, the report provided encouraging hints that the company will continue to deliver value to its shareholders.
Upon the release of Meta Platforms’ Q2 2023 results, the market responded positively, causing a 7% surge in META stock on July 26. This reaction was warranted, considering the company’s earnings beat and optimistic forward guidance.
Let’s dive into the numbers. Meta Platforms announced quarterly revenue of $32 billion, showcasing an 11% year-over-year increase and surpassing the analyst consensus estimate of $31 billion. On the bottom line, Meta Platforms posted earnings per share (EPS) of $2.98, rising by 21% compared to the previous year and exceeding Wall Street’s expectations of $2.92.
Looking ahead, Meta Platforms guided for third-quarter revenue ranging from $32 billion to $34.5 billion, surpassing analysts’ consensus estimate of $31.2 billion. These predictions further fuel the optimism for continued growth.
In addition to the impressive financial results, Meta Platforms also reported that many people continue to use their family of apps. For instance, the company stated that its third-quarter family daily active people increased by 7% year over year, reaching an average of 3.07 billion in June 2023.
While it is too early to determine the full effectiveness of Zuckerberg’s cost-savings plan, Meta Platforms has reduced its headcount by 14% year over year, resulting in a workforce of 71,469 as of June 30, 2023. The company’s total costs and expenses increased by 10% to $22.61 billion in the third quarter, leaving room for further evaluation in upcoming reports.
However, there is positive news on the capital expenditure front. Meta Platforms revised its full-year 2023 capex forecast, reducing it to a range of $27 billion to $30 billion from the previous estimate of $30 billion to $33 billion. This adjustment indicates the company’s commitment to cost reduction.
Long-term investors of Meta Platforms have experienced a rough 2022 but had an astounding 2023 so far. In light of the strong results and promising guidance, is it time to take profits? Not yet. Experts believe that Meta Platforms’ upward trajectory will continue, with the next milestone being the stock’s all-time high price of approximately $380. While the timeline for reaching this milestone remains uncertain, investors are advised to be patient and stay in the trade, at least until the end of 2023.
There are compelling reasons to believe that Meta Platforms will maintain its excellent performance. It is crucial for Zuckerberg to adhere to his cost-reduction plan, further strengthening the company’s prospects. With continued dedication to innovation and growth, it may only be a matter of time before Meta Platforms’ share price surpasses $380 and moves towards the $400 mark.
