Meta Platforms (NASDAQ: META) is scheduled to report its fiscal Q3 2023 results on Wednesday, October 25, 2023. We expect the stock to post mixed results with earnings topping the consensus but revenues missing the mark. The company surpassed the street expectations in the last quarter, with revenues increasing by 11% y-o-y to $32 billion. Further, the daily active users (DAUs) and ad impressions delivered across the META Family of Apps rose by 5% and 34%, respectively. That said, the average price-per-ad was down by 16% y-o-y. We expect the Q3 results to be on similar lines. Our interactive dashboard analysis on Meta Platforms’ Earnings Preview has more details.
Amid the current financial backdrop, META stock has witnessed gains of 15% from levels of $275 in early January 2021 to around $310 now, vs. a similar change for the S&P 500 over this roughly 3-year period. However, the increase in META stock has been far from consistent. Returns for the stock were 23% in 2021, -64% in 2022, and 156% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 10% in 2023 – indicating that META underperformed the S&P in 2021 and 2022. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for other heavyweights in the Communication Services sector including GOOG, NFLX, and CMCSA, and even for the megacap stars TSLA, MSFT, and AMZN. In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could META face a similar situation as it did in 2021 and 2022 and underperform the S&P over the next 12 months – or will it see a strong jump?
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.