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Social media and metaverse company Meta Platforms Inc (NASDAQ:META) reported fourth quarter financial results and first quarter guidance after market close Wednesday.
Here was what analysts were saying about the report as shares soared Thursday.
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The Meta Platforms Analysts: Bernstein analyst Mark Shmulik had an Outperform rating and raised the price target from $170 to $210.
Needham analyst Laura Martin had an Underperform rating and no price target.
Rosenblatt analyst Barton Crockett upgraded shares from Neutral to Buy and raised the price target from $104 to $220.
Morgan Stanley analyst Brian Nowak had an Equal-weight rating and raised the price target from $130 to $190.
Related Link: Trading Strategies For Meta Platforms Stock Before And After Q4 Earnings
The Analyst Takeaways: Mark Zuckerberg said in the earnings release that 2023 would be the year of efficiency for Meta Platforms. Bernstein's Shmulik called it, “the year of the efficient rabbit” in his note, a reference to the Chinese New Year.
“The thing about religion is that it requires a leap of faith. Belief in something that you may not ever be able to conclusively prove,” Shmulik said.
The analyst said 2022 was a tough year for Meta Platforms and some were ready to throw in the towel on the company.
“It appears that Meta has found their own religion on efficiency/profitability and investors now find a leaner, sharper company before them.”
Rosenblatt Securities' Crockett called Meta a “reasonably-priced stock” and upgraded shares while more than doubling the price target on the stock.
“When we launched coverage of Meta April 19, a confluence of high spending, weakening macro and ad clouds kept us on the sidelines with a NEUTRAL rating,” Crockett said.
The analyst pointed to cost controls from Meta showing improvement. Crockett also said Meta had a history of spending less than its guidance.
Crockett added there was a “solidifying story for accelerating growth” for Meta with click-to-messaging, Reels and inflation easing.
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Lower spending and improved cost controls were highlighted by Morgan Stanley's Nowak in the earnings note.
“Meta’s cultural change focused on efficiency is leading to lower opex/capex while investments drive faster rev/usage growth,” Nowak said.
Zuckerberg highlighted 2023 being the year of efficiency and Nowak noted the word “efficiency” was used more than 25 times during the company’s 60-minute earnings call.
“We also expect management to continue to look for more efficiencies on how they operate and invest.”
The analyst said revenue mattered more now than costs going forward.
“In our view, Meta’s ability to cleanly deliver a path toward double-digit 2H23 revenue growth and teens growth in ’23 with a meaningfully lower cost structure will be important to driving further significant upside toward our bull case.”
Needham's Martin took the bearish side on Meta Platforms questioning if the company had “terminal value.”
The analyst said Meta Platforms was tied to the rules of Apple Inc (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) for their iOS and Android operating systems, respectively. The company was also tied to users and influencers who can exit Meta products and go to competitors such as TikTok and YouTube.
“If Meta does not control either its distribution or content, does Meta have a terminal value?” Martin asked.
The analyst said Facebook was a replacement for Myspace, which became worthless.
Martin said she liked the focus on efficiency for Meta Platforms, but fundamentals were deteriorating.
“We believe it is too early to buy META until it discontinues its policy of lowering its revs per engagement hour.”
META Price Action: Meta shares are up 23.94% to $189.78 on Thursday at publication.
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Photo: salarko via Shutterstock
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.