Meta Platforms Stock Topped The Consensus In Q2, What’s Next?

Meta Platforms’ stock (NASDAQ
NDAQ
: META) has rallied 159% YTD, while the S&P500 is up only 18% over the same period. The stock is currently trading around $312 per share, which is slightly below its fair value of $310 – Trefis’ estimate for Meta Platforms’ valuation. The company posted better-than-expected results in the second quarter of 2023, with revenues increasing 11% y-o-y to $32 billion. Further, daily active users (DAUs) grew 5% y-o-y to 2.06 billion for June 2023, followed by a 34% y-o-y improvement in the ad impressions across its Family of Apps. However, the average price-per-ad declined by 16% y-o-y in the quarter. On the cost front, the total expenses increased 10% y-o-y, primarily due to higher legal costs and restructuring charges. Overall, the net income was $7.8 billion – up 16% y-o-y.

The top line grew 7% y-o-y to $60.6 billion in the first half of FY2023. It benefited from higher DAUs and ad impressions, partially offset by lower revenue-per-ad. Notably, digital ad spending was down over the recent quarters due to tough macroeconomic conditions. Further, the costs and expenses witnessed an unfavorable increase over the first two quarters, resulting in a 5% drop in the net income to $13.5 billion.