Meta Platforms Earnings Loom, Evercore Expecting Beat

Ahead of the expected release of their third-quarter report, tomorrow after market close, Meta Platforms (NASDAQ: META) has received a vote of confidence from investment firm Evercore ISI.

The firm, drawing on a combination of intra-quarter data point checks and analysis, anticipates that Meta will present a “modest Beat & Bracket Q3” performance. The question as to whether a modest beat will be enough for bulls who have seen Meta's stock price gain 66.96% this year, or 480% over the past 2 years, warrants some consideration.

The consensus expectations of $5.28 in EPS, and $40.31 billion in revenues would reflect continued improvement from the firm. With each of the most recent three reports delivering beats on both top and bottom lines and continuing to impress markets, a further outperformance might almost be expected out of the firm, but is any element of that priced in?

Evercore ISI's stance underlines its belief the tech company is poised to exceed predictions with upside potential, considering the analysts deem the street's existing revenue estimate for Q3 “reasonable,” and they anticipate more upside than downside variance. Furthermore, the firm holds the Q4 revenue estimate to be “slightly conservative” given the historical data, signalling a possibly solid performance for the end of the year.

While maintaining an Outperform rating, Evercore ISI sets its sights high for Meta, with a $600 price target. This rating speaks to the firm's expectations for the company's financial health and market performance, but the price target in itself is not too far away from recent price action. Such has been the recent trend at META, that the stock is trading up around $581 in this morning's pre-market session, with the perceived potential gain of $19 from here translating into a 3.27% upside.

Evercore ISI's prognosis for Meta Platforms is not based on optimistic speculation alone. They suspect that Meta will continue its FY24 total expense and capital expenditure (capex) guidance this quarter, a sign of disciplined financial governance and predictable investment planning. However, the firm does not anticipate early guidance from Meta on FY25 capex and total expense, suggesting a cautious approach in the longer term.

The firm's Outperform rating is maintained alongside this financial diligence, ensuring investors that despite the price target, the strategy and operations of Meta Platforms are expected to support a climb in stock value.

Meta Platforms, best known for its eponymous social network Facebook, has broadly diversified its operations to include various digital platforms and ventures into futuristic technology such as augmented and virtual reality. Although specific operational data points have not been provided, Meta's broad business summary indicates it covers multiple facets of the digital and social media landscape, which may contribute to its potential outperformance in future fiscal quarters.

Evercore ISI's analysis points to a strong quarter for Meta Platforms, with forecasts suggesting that the tech conglomerate will likely outperform analysts' expectations but time will tell soon enough.