Meta Shares Break Higher
Shares in Facebook parent company Meta Platforms spiked after the close yesterday and are trading around 12% higher pre-market today following the release of a bumper set of earnings results for Q1. In terms of headline numbers, Meta posted Q1 EPS of $2.20, beating expectations for a $2.02 result. On revenues, Meta posted $28.645 billion, well above the $27.669 billion the market was looking for. Notably, these results put an end to the three-quarter earnings losing streak for Meta and saw its share price hitting 14-month highs.
User Revenues Growing
Looking at the breakdown of Meta’s results, the data is encouraging for shareholders. Daily active users were seen spiking to 2.04 billion against 2.01 billion expected. Monthly active users were in line with estimates at 2.99 billion while average revenue per user was seen much higher at $9.62 vs $9.30 expected.
Big Spending
As with Alphabet and Microsoft, traders were keen to hear about the company’s AI and AR business. Reality Labs, which is responsible for developing Meta’s augmented reality products for the metaverse, recorded a $3.99 billion operating loss. Additionally, CEO Mark Zuckerberg said this figure will increase this year as the company pumps more investment into that sector.
Restructuring
Looking ahead, sentiment remains bullish for Meta on the back of Zuckerbrg’s recent announcement that 2023 will be a year of efficiency for the company as it focuses on restricting and slimming down its workforce along with increased expenditure in Reality Labs.
Technical Views
Meta
With the bull channel off last year’s lows continuing to develop, Meta shares have now broken above the 214.18 level resistance. While above here, the focus is on a further push higher and a challenge of the 244.52 level next. Weakness in momentum studies recently suggests some near-term caution. However, while the 185.11 level and channel lows hold, the outlook remain bullish.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.