Meta Platforms, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in Meta Platforms, Inc. (NASDAQ:META) had a good week, as its shares rose 4.8% to close at US$488 following the release of its second-quarter results. Meta Platforms reported US$39b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$5.16 beat expectations, being 8.4% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Meta Platforms

Taking into account the latest results, the most recent consensus for Meta Platforms from 59 analysts is for revenues of US$161.5b in 2024. If met, it would imply a reasonable 7.8% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 4.2% to US$21.19. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$159.1b and earnings per share (EPS) of US$20.28 in 2024. So the consensus seems to have become somewhat more optimistic on Meta Platforms' earnings potential following these results.

The consensus price target rose 5.3% to US$561, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Meta Platforms at US$647 per share, while the most bearish prices it at US$382. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Meta Platforms'historical trends, as the 16% annualised revenue growth to the end of 2024 is roughly in line with the 16% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So it's pretty clear that Meta Platforms is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Meta Platforms following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Meta Platforms analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Meta Platforms is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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