Meta reported third-quarter earnings results that disappointed investors. The Earnings per share came at $1.64 well below the expectations of $1.89 while revenue for the quarter came at 27.71 billion slightly better than the forecasts of $27.38 billion.
The average price per ad dropped -18%, worse than the expectations of -15.3%. The Ad impressions rose 17% year over year.
Daily active users (DAU) reported at 1.98 billion in line with forecasts.
Monthly Active Users (MAUs) came up 2% (y/y) at 2.96 billion, in line with expectations.
Meta’s employees rose 28% year-over-year at 87,314 as of September 30.
Costs and expenses rose 19% (year-over-year) at $22.05 billion.
The company’s guidance for the fourth quarter revenue is between $30.0 to 32.5 billion the forecasts were for $32.0 billion. Meta also expects the full-year total expenses to be between $85 and to 87 billion, slightly lower than the previous forecast of $85 to 88 billion.
Meta Q3 Analysts’ Expectations
Analysts expect earnings per share at $1.89 (-41% from Q3 2021) and Revenue of $27.38 billion (-5% from Q3 2021). The Daily Active Users (DAU) are expected at 1.98 billion, while the Monthly Active Users (MAUs) are forecasted at 2.96 billion. The Average Revenue per User (ARPU) is estimated at $9.32. Meta Daily Active Users in Q2 2022 were at 197 billion in the USA and Canada slightly lower than the same quarter of 2020.
Facebook is facing a decline in online advertisement spending something we have already seen on Alphabet Q3 earnings report Google said that financial services advertisers, gaming companies, insurance, loans, mortgages and crypto, advertised their products less.
On October 24, BofA Securities downgraded Meta Platforms from Buy to Neutral and cut the price target from $196 to $150 while MKM Partners cut the Meta stock price target from $240 to $195 on October 19th.
Meta Stock Price
Meta stock price is under selling during 2022, it has lost almost 61% of its value since the beginning of the year. Nasdaq composite has lost 29$ in the same period. The market cap now stands at $369.58 billion. The stock has a 52-week trading range between $122.53 to $353.83. Meta stock hit an all-time high on September 1st, 2021, at $384.33.
The technical picture for META stock is clearly bearish as it hovers below all major moving averages. Bulls need first a move above $147.20 the 50-day moving average in order to attract more buying interest. Meta can enjoy a sustained rally if the price breaks above the 100-day moving average at $158.35.
On the contrary, the recent low at $122.53 from October 13 would provide strong support. Below that level, we might see the sell-off accelerate towards $110.
Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently, Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).
