Meta Platforms (NASDAQ:META) promised a “year of efficiency” that included layoffs and other cost-cutting measures in 2023. The data suggests that Meta’s efficiency plan is working out well. Nevertheless, some shortsighted traders are selling META stock, but future-facing investors can pick up those shares at a nice price.
In addition, Meta Platforms is making an intelligent move in Europe as the company seeks to become less rebellious and more compliant.
Overall, it looks like Meta Platforms is making the right moves even though the market doesn’t seem to recognize this. This opens up a window of opportunity for investors who recognize Meta Platforms’ true value.
Meta Platforms Decides to ‘Play Ball’ With Regulators
Is Meta Platforms CEO Mark Zuckerberg maturing and losing his rebellious streak as he ages? Maybe so, as Meta Platforms is ready to “play ball” with regulators and lawmakers in Europe instead of fighting against the system.
At least, that’s the conclusion I’m drawing as Meta Platforms’ Facebook and Instagram will offer advertisement-free subscription options in Europe. There are definite advantages to doing this.
First, this move could help Meta Platforms avoid the scrutiny and ire of European regulators. Meta Platforms stated it is “committed to complying” with “evolving European regulations.” Offering users the choice of turning off intrusive advertisements, as well as pausing advertisements for users under 18, will allow Meta Platforms to appease regulators who might seek to punish Meta Platforms.
Besides, Meta Platforms will charge fees for the ad-free subscription options so that the company can generate revenue from this. In other words, it’s a win-win scenario if everything goes according to plan.
META Stock Falls on Uncertainty Warning
In a conference call to discuss Meta Platforms’ third-quarter 2023 results, Meta Platforms Chief Financial Officer (CFO) Susan Li admitted, “We are very subject to volatility in the macro landscape.” Furthermore, Li acknowledged that the “revenue outlook is uncertain” for 2024.
Short-term traders focused on those two statements when they panic-sold META stock not long ago. They punished Meta Platforms for Li’s honesty while ignoring its quarterly achievements.
Sure, the outlook for next year’s revenue is currently unknown. Yet, Meta Platforms’ third-quarter revenue was substantial, increasing 23% yearly to $34.1 billion. Moreover, this result beat Wall Street’s call for $33.5 billion.
Turning to the bottom-line results, Meta Platforms posted Q3 2023 earnings of $4.39 per share. That’s up 168% year over year and far ahead of the analysts’ consensus estimate of $3.61 per share. Indeed, this is an outstanding quarterly performance, yet some stock traders were more concerned with Li’s “volatility” warning.
Additionally, Meta Platforms is making progress with its “Year of Efficiency” strategy. To demonstrate this, Meta Platforms reduced its third-quarter 2023 costs and expenses by 7% year-over-year.
META Stock: Prepare for an Epic Battle
Recently, I predicted that there would be a battle between the Meta Platforms, bulls, and bears. in light of Meta Platforms’ terrific quarterly results, I fully expect the bulls to prevail in the long run.
The sellers may win a small battle here and there, but the buyers will win the war. Meta Platforms is making smart moves and demonstrating sales and income growth. So, if some “nervous Nellies” want to panic-sell META stock, you can buy their shares as they’ll eventually be much more expensive.
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.
