Meta Platforms Earnings – Here’s What to Expect

Meta Platforms (NASDAQ: META) is set to release its first-quarter earnings on Wednesday, April 26, and investors will be hoping the stock can get a further boost after climbing significantly this year.

META shares are up more than 73% in 2023 after hitting a low of $88.09 in November 2022. That was Meta's lowest level in over six years, but while it is back on the rise, it still has some way to reach its 2021 highs of over $380 per share.

In its fourth-quarter earnings, the Facebook parent company told investors it expects first-quarter 2023 total revenue to be between $26 billion and $28.5 billion, while it lowered its full-year total expenses forecast to between $89 billion and $95 billion due to the slower than anticipated growth in payroll expenses and cost of revenue. The analyst consensus estimate for earnings per share in Q1 is $2.02.

The social media giant is on track to cut around 21,000 jobs. It has also implemented a hiring freeze as it aims to significantly cut costs in what CEO Mark Zuckerberg labelled the company's “year of efficiency.”

In addition, Meta is still struggling to monetize its metaverse venture, or what it has called its Reality Labs Division, which recorded a $4.28 billion operating loss in the fourth quarter. As a result, investors will be keeping a keen eye on how it performed in the latest quarter.

Last week, Wolfe Research raised its price target on Meta Platforms to $260 from $230, maintaining an Outperform rating on the shares. The firm told investors in a note that Meta remains one of its top picks into first-quarter earnings.

Wolfe Research added that the results and second-quarter guidance should represent a relatively stable demand environment and progress on growth initiatives and cost savings. Moreover, despite the share price rise this year, the firm still believes Meta's valuation is compelling at current levels.

Furthermore, BofA analyst Justin Post also raised his firm's price target on Meta Platforms last week, lifting it to $250 from $230, reiterating a Buy rating. Post said the firm's ad checks are “mixed,” indicating that first-quarter spending decelerated from the fourth quarter, but with February improving vs. January. He also noted that Sensor Tower data showed “stable” daily active use trends.

Overall, out of 49 analysts, 39 have a Buy rating on the stock, seven have a Hold rating, and three have a Sell rating on Meta Platforms shares, according to TipRanks. The average price target of $234.31 represents a potential 10% upside.