Meta Platforms Inc., the social-media giant, saw a significant boost in its stock on Thursday following the release of its impressive earnings report. According to analyst Mark Shmulik of Bernstein, Meta has been excelling in all areas and has “simply done everything right.”
Meta’s initiatives are currently firing on all cylinders, leading to 11% revenue growth in the latest quarter. Additionally, the company’s “monster guide heard around the Street” indicated a projected 15% to 24% growth in overall third-quarter revenue. This success can be attributed to increased user engagement, the successful monetization of Reels, and positive reception from advertisers.
The remarkable performance of Meta has not gone unnoticed in the stock market. Meta shares surged nearly 10% during premarket trading on Thursday, building on an already impressive year-to-date increase of 148%. In Mark Shmulik’s opinion, this dramatic shift in sentiment towards the stock is a testament to Meta’s transformation from “the most hated name in the Internet” to one of the most beloved and promising investments in the sector.
Mark Shmulik expressed his unwavering support for Meta, stating, “We make no secret that while we love all our children equally, we’ve always loved Meta the most.” He maintained his market-perform rating and raised his target price for Meta’s stock from $350 to $375. Shmulik praised Meta’s founder, Mark, for consistently overcoming obstacles, executing strategies flawlessly, adapting to changes, and delivering outstanding results.
Michael Nathanson of SVB Moffett Nathanson echoed these sentiments and shared Shmulik’s enthusiasm for Meta’s accomplishments.
While Mark Zuckerberg has often been mocked for the massive (and yet to be proven) investments in the Metaverse – which included a new corporate name – many of his other recent actions have worked nicely to turn around META’s narrative on META and the perception of his leadership of the company.
According to industry expert Nathanson, Meta made a smart move by addressing Apple Inc.’s privacy-related change early on. This strategic decision helped Meta refocus its engineers on rebuilding lost signal, which is now proving to be a fruitful endeavor.
Meta’s Latest Triumph: Threads
One of the clearest indications of Meta’s improved execution is the successful launch of Threads. Despite a slight decline in user interest, the company remains optimistic about this product and sees it as a potential catalyst for future revenue growth. Developed swiftly by a small team, Threads holds promise as a new mass-market offering.
“Taken all together, these decisions have created one of the most startling turnarounds in company performance and market sentiment that we have ever witnessed,” continued Nathanson. He maintains his outperform rating on Meta’s stock and raises his target price from $295 to an impressive $370.
Ken Gawrelski of Wells Fargo echoed Nathanson’s sentiments, admitting their previous miscalculation and announcing their bullish stance on Meta. He upgraded the stock to overweight from equal weight and set a new price target of $389, citing Meta’s “blowout” third-quarter forecast as potentially sustainable.
In conclusion, Meta’s journey from skepticism to success is a testament to Zuckerberg’s leadership and the transformative decisions made by the company. As these positive changes continue to unfold, the market sentiment surrounding Meta is changing drastically.
