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On Wednesday, Goldman Sachs reiterated its Buy rating on Meta Platforms Inc. (NASDAQ: NASDAQ:), maintaining a price target of $636.00 for the stock. The financial institution’s analysis came after Meta’s third-quarter earnings report for 2024, which showed revenues slightly exceeding Goldman Sachs and other Wall Street estimates, falling within the upper range of the company’s guidance.
For the fourth quarter of 2024, Meta’s forward guidance suggests revenues between $45 billion and $48 billion, potentially leading to upward revisions in future earnings estimates. The company’s operating income for the quarter was around 13% above Goldman Sachs’ projections but slightly below expectations from other Wall Street analysts.
Meta’s performance showcased a blend of strong revenue growth and operational efficiency in its Family of Apps segment, supporting the funding of operational losses in its Reality Labs division. Additionally, Meta narrowed its full-year 2024 expense forecast to $96 billion to $98 billion and capital expenditure (capex) to $38 billion to $40 billion with one quarter remaining in the fiscal year.
The analyst expects the earnings call to focus on various key areas such as the impact of the broader macroeconomic environment, regulatory changes affecting user and advertising trends, Meta’s unique revenue dynamics, management’s perspective on the development of artificial intelligence, mixed reality, and spatial computing, as well as the interpretation of the company’s operational and capital expenditure trends in the upcoming years.
In recent news, Meta Platforms Inc. has forecasted a revenue increase for the holiday quarter driven by anticipated strong advertising spending. The company reported a profit of $6.03 per share in the third quarter, surpassing the consensus estimate of $5.25 per share. Revenue reached $40.59 billion, slightly above analysts’ predictions. For the fourth quarter, Meta expects revenue to be between $45 billion and $48 billion, higher than the average analyst estimate.
In another development, Donald Trump has pledged to take legal action against opponents and tech giants including Meta Platforms if he wins the upcoming election. Trump accused Meta of potential election interference and criticized CEO Mark Zuckerberg’s donations to election infrastructure. He threatened legal consequences if any illegal activities are found.
InvestingPro Insights
Meta Platforms Inc. continues to demonstrate strong financial performance in line with Goldman Sachs’ optimistic outlook. According to InvestingPro data, Meta’s revenue growth remains robust at 24.28% over the last twelve months, with an impressive gross profit margin of 81.49%. The company’s P/E ratio of 29.42 suggests a reasonable valuation considering its growth prospects.
InvestingPro Tips highlight Meta’s financial strength, noting that the company “holds more cash than debt on its balance sheet” and has “liquid assets exceed short term obligations.” These factors contribute to Meta’s financial flexibility, potentially supporting its ongoing investments in AI and mixed reality technologies as mentioned in the earnings call focus areas.
The company’s strong market position is evident in its substantial market capitalization of $1.5 trillion USD. Additionally, an InvestingPro Tip indicates that “9 analysts have revised their earnings upwards for the upcoming period,” aligning with Goldman Sachs’ expectation of potential upward revisions in future earnings estimates.
For investors seeking more in-depth insights, InvestingPro offers 17 additional tips on Meta Platforms Inc., providing a comprehensive analysis of the company’s financial health and market position.
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