Ruchi Gupta
2 min read
In This Article:
Meta Platforms (META) is the largest social media company in the world. The company owns and operates platforms like WhatsApp, Facebook, Instagram, Messenger, and Threads, making it a household name with a giant footprint.
Meta’s stock has gained 23.5% YTD but had struggled before picking up the pace toward the end of April. Shares are now up 19% in the last three months and are just 4.5% below their all-time highs.
Meta Platforms reported its first-quarter results on April 30 posting a profit of $16.64 billion translating to $6.43 per adjusted share. The figure easily topped analysts’ estimates which came at $5.22 per share. The company generated $42.31 billion in revenue in the quarter, up 16% year-over-year while surpassing analysts’ estimate of $41.24 billion.
During the quarter, Meta saw a 6% annual rise in its family daily active people, which climbed to 3.43 billion. Ad impressions rose 5% across platforms while pricing increased 10% per ad on average.
For the ongoing second quarter, management anticipates revenue in the range of $42.5 billion to $45.5 billion. For the full year, management has raised its capital expenditure outlook to $64 billion and $72 billion from its previous outlook of $60 billion and $65 billion. Meta cited additional data center investments to assist its AI efforts along with a rise in expected infrastructure hardware cost.
Meta Platform has announced the monetization of its messaging platform, WhatsApp. The company will introduce ads in the app’s Updates tab, generating around $3 billion to $5 billion in annual revenue as projected by Morgan Stanley. In the most bullish scenario, annual revenue from WhatsApp ads could surpass $6 billion. Meta says these ads will not interfere with private messages and calls and will be limited to the Updates sections, frequented by 1.5 billion users daily.
Beyond advertisements, the company is also exploring other avenues for revenue such as Channels promotions or Channels Subscriptions. Morgan Stanley believes Meta’s extensive ad infrastructure supported by the global users should be able to support this projected revenue growth.
Analysts are bullish on the tech giant with a consensus “Strong Buy” rating but its mean price target of $715.52 is below its current trading price. The stock has been covered by 54 analysts, receiving 45 “Strong Buy” ratings, three “Moderate Buy” ratings, four “Hold” ratings, and two “Strong Sell” ratings.
