Meta Platforms lost market cap after disappointing earnings, but analysts still maintain "Strong Buy" rating.

From NASDAQ: 2024-05-12 10:50:18

All but Meta Platforms of the “Magnificent 7” stocks impressed markets with their earnings, causing share prices to rally. Despite missing on revenue and earnings, even Tesla saw a jump in its stock price. On the other hand, Meta lost $132 billion in market cap and faced target price cuts from analysts after its earnings report. Meta’s Q1 revenues exceeded expectations but the company’s Q2 revenue guidance fell short, leading to a decline in stock price. Additionally, Meta plans to increase its investments towards AI and the metaverse, resulting in raised capex guidance for 2024. The company expects increasing operating losses for its Reality Labs segment due to ongoing product development efforts. Zuckerberg warned of volatility in shares during periods of significant investments in new products. Several brokerages lowered Meta’s target prices post-earnings, citing concerns about revenue growth deceleration and increased expenses. Analysts still maintain a “Strong Buy” rating for Meta stock, with a mean target price of $516.39 and a Street-high target price of $600. Despite growth drivers like Threads, AI initiatives, and the metaverse, potential legal and regulatory risks could dampen sentiments around Meta stock. With a balanced risk-reward profile at current levels, it may be prudent to hold onto existing shares of Meta rather than adding new positions.



Read more at NASDAQ: This ‘Magnificent 7’ Stock Fell Out With Analysts After Earnings, But Is It Time to Sell?