The assessment of social media giant Meta Platforms (NASDAQ: META) is now the center of attention following the company’s robust Q2 2024 financial report, which surpassed the majority of experts’ forecasts.
Trading at $474 at the close of the market on July 31, the stock observed an 8% surge in just 24 hours after the favorable results. META shares are currently targeting the $500 threshold and have maintained a positive growth trajectory in 2024, climbing over 37% since the year’s commencement.
Additionally, the stock exhibited significant gains in early trading before the market opened on August 1, reaching $517, indicating a 9% upswing.
Meta’s stock performance comes in the wake of the company reporting Q2 2024 earnings per share (EPS) that surpassed expectations at $5.16, despite forecasts of $5.72, with revenue hitting $39.1 billion, exceeding the estimated $38.3 billion. A substantial 98% of the revenue was generated from advertising, predominantly on Facebook and Instagram.
Furthermore, the firm reported a user base of 3.27 billion daily active users, surpassing predictions, corresponding to over 40% of the global population interacting daily with Meta’s platforms.
Overall, these outcomes are anticipated to alleviate worries regarding Meta’s significant investments in artificial intelligence (AI).
In view of this positive performance, multiple reputable financial analysts have revised their price targets for Meta, indicating a heightened optimism about the company’s future potential.
For instance, Oppenheimer analyst Jason Helfstein increased the price objective from $525 to $615 while maintaining an ‘outperform’ designation for the stock. This modification follows Meta’s strong revenue results and promising guidance for the third quarter. Helfstein highlighted CEO Mark Zuckerberg’s commitment to AI investment as a critical factor expected to enhance future advertising capabilities and user engagement.
Likewise, financial giant Goldman Sachs (NYSE: GS) adjusted its Meta perspective, raising the price target to $555 from $522 while upholding a ‘buy’ recommendation. The company emphasized Meta’s extensive reach across its diverse platforms as a strength that positions it favorably to adapt to shifting user behaviors. The analysts also pointed out Meta’s potential in short-form video, messaging, online commerce, augmented reality, and social media as significant growth drivers.
In another instance, Piper Sandler raised its projected price to $575 from $545, maintaining an ‘overweight’ stance, Rosenblatt increased its target to $643 from $562, reaffirming a ‘buy’ stance, and Jefferies adjusted its objective to $600 from $565, continuing to advocate for the stock as a ‘buy.’
Conversely, 28 industry analysts at TipRanks expect a bullish evaluation above $500, with the majority endorsing a ‘buy’ perspective. The analysts predict Meta will trade at an average of around $549 in the next year, with the highest forecast at $630 and the lowest at $360.
Importantly, this surge in ratings is poised to stimulate investor interest in Meta, particularly as the company deals with various obstacles, including intense competition in the social media sector impacting its revenue expansion.
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