Even after a spectacular first half of 2023, I tried to brace investors for more gains with Meta Platforms (NASDAQ:META) stock.
A terrific earnings report pushed the Meta Platforms share price higher, but it’s still not too late to get on board. I fully expect Meta Platforms to continue delivering one positive surprise after another in the current quarter and beyond.
Prior to Meta Platforms’ second-quarter 2023 earnings report, investors undoubtedly had some pressing questions. Would CEO Mark Zuckerberg’s cost-cutting plan yield the desired benefits? Are people still using Meta Platforms’ social media apps in large numbers?
And perhaps most importantly, is Zuckerberg optimistic about the current quarter? Meta Platforms provided some encouraging hints that the company will continue to provide excellent value to the shareholders.
META Stock Blasts Off After Earnings Beat
It’s easy to gauge the market’s response to Meta Platforms’ Q2 2023 results, as META stock jumped 7% soon after the results were released on July 26. This reaction was perfectly reasonable because Meta Platforms delivered an earnings beat and optimistic forward guidance.
Here’s the rundown. Meta Platforms announced quarterly revenue of $32 billion, up 11% year over year and higher than the analyst consensus estimate of $31 billion.
Turning to the bottom line, Meta Platforms posted EPS of $2.98, up 21% year over year; this result beat the $2.92 that Wall Street had expected.
Furthermore, Meta Platforms guided for third-quarter revenue in the range of $32 billion to $34.5 billion. That range is above the analysts’ consensus call for $31.2 billion in Q3 revenue.
Tech Products Should Boost Q3 Revenue
Along with the positive financial results, Meta Platforms also indicated that many people continue to use Meta’s “family” of apps. For example, Meta Platforms’ third-quarter “family daily active people” increased 7% year over year to “3.07 billion on average for June 2023.”
So far, it’s hard to determine whether Zuckerberg’s cost-savings plan is working. As of June 30, 2023, Meta Platforms had reduced its headcount by 14% year over year to 71,469.
The company’s total costs and expenses increased 10% to $22.61 billion in the third quarter. So, the jury’s still out and the upcoming quarterly reports should provide more clarity on this matter.
However, Meta Platforms did reduce its full-year 2023 capital expenditures (capex) forecast to a range of $27 to $30 billion. The prior estimate had been $30 to $33 billion, so hopefully Meta Platforms will stick to its revised range.
META Stock: All-Time High Prices Are Coming
Meta Platforms’ long-term investors had a rough 2022 but an amazing 2023 so far. So, is it time to take profits? Not yet, as Meta Platforms’ strong results and guidance indicate that more gains are coming.
The next milestone to reach is META stock’s all-time high price of around $380. There’s no way to know how long it will take to get there. Investors should be patient and stay in the trade, at least for the rest of 2023.
As we’ve discovered, there are reasons to believe that Meta Platforms will continue to deliver excellent results. Hopefully, Zuckerberg will stick to his cost-reduction plan for the company.
If that happens, then it shouldn’t be long before the Meta Platforms share price breaks above $380 and then $400.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
