Tag: Meta Platforms

Meta Platforms (META)

The bar was too high for Meta to clear.

Post earnings the markets punished it 20% for a marginally weaker guidance and higher than expected CAPEX. Pre-earnings the stock had been up 130% for the past year, so this 20% drop was perhaps, overdue.

Rev beat of 36.46Bn v 36.12Bn 27% YoY – but too little a beat.

Rev guidance 36.5Bn to 39Bn or a midpoint of 37.75 V 38.24,  still 18.5% YoY growth but too much of a miss.

Capex is higher at 37.5Bn midpoint now V 33.5Bn – bad for Meta but good for Nvidia/AI  most of the Capex is for AI.

META has a GAAP operating profit margin of 49% in the family of apps business – that’s a phenomenal margin, but it drops substantially because of losses in the Reality Labs business. Still, its company-wide margin was 38% – a 52% increase YoY.

Will parse through the earnings call/analysts’ upgrades tomorrow morning, the selloff may be overdone.