Meta at Record-High: What Lies Ahead of ETFs?
Meta's (META) stock price has fully rebounded from its tumultuous year in 2022, as it inched up almost 2% on Friday to close at $383.45, setting a new record. This impressive rally came on the heels of an almost 170% jump in the past year, signaling investors' satisfaction with CEO Mark Zuckerberg's cost-cutting efforts in 2023, which led to the elimination of over 20,000 jobs.
Mark Zuckerberg's "Year of Efficiency"
After a disastrous 2022 that saw Meta's stock plunge by 64% to its lowest point since 2016, CEO Mark Zuckerberg presented 2023 as a "year of efficiency," as quoted on CNBC. His strategic initiatives seem to have paid off, contributing to the remarkable recovery in the company's stock price.
This has put focus on Meta-heavy ETFs like Communication Services Select Sector SPDR Fund XLC, Fidelity MSCI Communication Services Index ETF FCOM, Vanguard Communication Services ETF VOX and iShares Global Comm Services ETF IXP. These ETFs put about 20%-25% focus on Meta stock.
Market Cap and Share Buybacks
While Meta's share price has reached a new high, its market capitalization remains below its peak in September 2021, which was near $1.1 trillion. This disparity is due to the company's substantial share buybacks, which have reduced the number of outstanding shares. The current market cap is still below $1 trillion.
Investor Confidence in AI Market
Investors are increasingly bullish on Meta's position in the thriving artificial intelligence market. Mark Zuckerberg recently hinted at the company's ambitious plans by stating that Meta will acquire 350,000 Nvidia H100 graphics cards by the end of the year, along with "almost 600k H100 equivalents of compute" when considering other GPUs. This significant investment underscores Meta's commitment to advancing its AI ambitions.
Will Meta Beat in Upcoming Earnings Report?
Meta is set to report its fourth-quarter earnings on February 1. Meta has an Earnings ESP of +1.46% and a Zacks Rank #2 (Buy). According to our methodology, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Zacks Consensus Estimate for the fourth quarter indicates a 60% year-over-year uptick in earnings and revenue growth of 20.7%. The earnings track record of the company is upbeat. It delivered a four-quarter average earnings surprise of 27.50% with earnings beat noticed in every quarter.
Price Target
Based on short-term price targets offered by 38 analysts, the average price target for Meta Platforms comes to $392.68. The forecasts range from a low of $285.00 to a high of $470.00. The average price target represents an increase of 4.4% from the last closing price of $376.13.
Broker Rating
Meta Platforms currently has an average brokerage recommendation (ABR) of 1.30 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 43 brokerage firms. The current ABR compares to an ABR of 1.17 a month ago based on 40 recommendations.
Of the 43 recommendations deriving the current ABR, 37 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 86.05% and 2.33% of all recommendations. A month ago, Strong Buy made up 92.5%, while Buy represented 2.5%.
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Vanguard Communication Services ETF (VOX): ETF Research Reports
Fidelity MSCI Communication Services Index ETF (FCOM): ETF Research Reports
iShares Global Comm Services ETF (IXP): ETF Research Reports
Communication Services Select Sector SPDR ETF (XLC): ETF Research Reports
Meta Platforms, Inc. (META) : Free Stock Analysis Report
