Proactive Investors - Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) is once again facing lofty expectations ahead of its second quarter financial report due on Wednesday, July 31, after the stock market closes.
The Street expects the Facebook (NASDAQ:META), Instagram, and WhatsApp parent to post an almost 20% jump in revenue from the year-ago quarter’s $32 billion to $38.3 billion.
Earnings per share (EPS) are expected to improve by almost 50% to $4.69 from $3.23 in Q2 2023.
Analysts at Bank of America (NYSE:BAC) see Meta meeting or exceeding the Street’s revenue estimates and delivering EPS above expectations on continued advertising execution, with ad revenue expected to be up 20% year-over-year.
For Instagram, based on data which suggests “healthy” time spent and user growth, they forecast daily active profiles at 3.3 billion and average reenue per user of $11.56, compared to Street estimates of 3.25 billion and $11.64 respectively.
They do not anticipate a repeat of Q1’s higher 2024 expense guidance but noted higher legal and capital expenditures are risks.
Meta is seen guiding 3Q revenue in the range of $37.5 to $40.5 billion, unchanged fiscal 2024 expenses in the range of $94 billion to $99 billion and stable to slightly higher capital expenses at $35 billion to $40 billion.
The bank’s analysts repeated their ‘Buy’ rating and $550 price target on Meta ahead of its earnings report.
Meta shares traded hands at about $458 late morning on Thursday.
“We remain positive on Meta & think Reels, Messaging, and AI-driven ad improvements are still early, and could lead to positive product surprises & revenue upside,” the analysts wrote.
“Also, there are press reports that Meta could be cutting Reality Labs spending, which could focus Street on core business valuation. Finally, with political spend, and potential TikTok ban in 1Q 2025, Meta could also see an ad spend benefit in 2H 2024.”