Meta Platforms surges 11% on strong results, outlook; Analysts bulled-up

Investing.com -- Meta Platforms reported Wednesday first-quarter results that topped Wall Street expectations and the social media giant provided upbeat revenue guidance amid ongoing progress to bring down costs.

Meta Platforms Inc (NASDAQ: META), the parent company of Facebook rose more than 11% in pre-market Thursday trade following the report.

Facebook announced EPS of $2.20 on revenue of $28.65 billion. Analysts polled by Investing.com anticipated EPS of $2.02 on revenue of $27.61B.

The better-than-expected results come as the company continued to make progress on its ‘year of efficiency’ pledge in 2022 and advertising revenue grew.

Headcount fell 1% to 77,114 year-on-year in Q1.

"[W]e have substantially completed the 2022 employee layoffs while continuing to assess facilities consolidation and data center restructuring initiatives," the company said.

Advertising revenue rose to $28.10B year-on-year in Q1 from $27.00B a year earlier.

Facebook daily active users, or DAUs, rose 4% to 2.04B, while monthly active people, or MAUs, rose 2% to 2.99B.

Ad Impressions across the company’s apps jumped 26%, but average price per ad fell 17% year-on-year, pressured by increasing competition.

The company guided second-quarter revenue in a range of $29.5B to $32B, above Wall Street estimates of $29.47B.

Looking further ahead, the company sees 2023 revenue guidance in the range of $86B to $90B, adding that it continued to "expect Reality Labs operating losses to increase year-over-year in 2023."

Goldman Sachs analyst Eric Sheridan lifted the price target to $300 from the prior $245 as the company continues to gain momentum.

"While some debates may persist around near-term revenue growth recovery/trajectory in the quarters ahead, we continue to see META as well-positioned against a number of long-term secular growth themes," Sheridan said in a note.

Similarly, JPMorgan analyst Doug Anmuth boosted the target by $35 to $305 as revenue growth is accelerating towards double digits.

"We believe the company is balancing improving N-T execution with critical long-term investments in AI, & management believes it is now operating from a position of strength."

Additional reporting by Senad Karaahmetovic

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