Positive developments at Meta, including a strong fourth-quarter exit and enthusiastic comments from Zuckerberg, sent the stock into a decade-long positive phase.
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On Thursday, shares of Meta Platforms (NASDAQ: META) rose more than 23%, marking one of the best days for the stock in a decade. This positive development benefited from optimistic comment by Meta CEO Mark Zuckerberg and a series of analyst updates prompted by the company’s strong fourth-quarter exit.
More on the decade-long development of Meta Shares
In addition to seeing its best performance in a decade, Meta Platform shares also rose to their highest point since last September. At the time, META was weeks away from reporting a horrible third-quarter 2022 earnings result that saw Zuckerberg come under fire. Several Wall Street analysts openly questioned the tech giant’s leadership amid an underperforming industry. However, analysts took a different stance following Meta’s latest quarterly release and subsequent rise in shares.
Commenting on the company’s revenue increase of $32.17 billion compared to an expected $31.53 billion, Evercore ISI analyst Mark Mahaney posed the question: “Is META really worth going up a 20 % on the secondary market?”
To which the Evercore ISI analyst also responded with an emphatic “Yes!” in addition, Mahaney cited “substantially reduced expense projections” and a larger-than-expected share buyback plan. The analyst raised his price target to $275 and doubled his “outperform” rating on Meta shares.
Meanwhile, Rosenblatt’s Barton Crockett upgraded his META rating to ‘buy’ and set a $220 price target. Crockett further said the reason for the upgrade was due to a more “attractive” valuation of Meta shares. Elsewhere, Guggenheim’s Michael Morris revised his META price target to $210 and maintained a ‘buy’ rating. In addition, he cited cost reduction and reliance on “momentum” messages from management.
Enthusiastic comments from Zuckerberg
Analysts were referring to Zuckerberg’s recent “Year of Efficiency” comments regarding Meta’s management outlook for this year. The guidance from Meta’s CEO came in the midst of his laudable fourth-quarter earnings report. Zuckerberg explained: “Our management theme for 2023 is the ‘Year of Efficiency’ and we are focused on becoming a stronger and more agile organization.”
In addition, Zuckerberg has pledged to cut costs while increasing efficiency amid economic uncertainty. The General Manager also demonstrated that increasing profitability is of paramount importance to Meta. Referring to the company’s admirable growth trajectory before last year’s slump, the Meta CEO said on an earnings call:
“The first 18 years, I think we grew 20%, compound 30% or a lot more each year. And then obviously that changed dramatically in 2022, where our revenue was negative for growth, for the first time in company history.”
Regarding the future, Zuckerberg took a practical and realistic approach, saying:
“We do not anticipate that [prolonged negative performances are] It will continue. But I don’t think it will go back to the way it was before. [uninterrupted profitability].”
Following its fourth-quarter 2022 revenue pace, Meta lowered its estimate for total expenses for this year to between $89 billion and $95 billion. This reduction marked a positive reduction from the company’s previous outlook of $94 billion to $100 billion.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify the crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
