After an epic rally and gains of nearly 200% in 2023, it may seem hard to believe. Meta platforms (NASDAQ:META) Wall Street was about to die in 2022. As 2024 began, the stock prices of the parent company of Facebook, Instagram, WhatsApp, and the Quest virtual reality headset were back at all-time highs during 2022. Pandemic.
Contrary to popular belief, Meta is much more than just a social media company, and this company isn’t just betting on the metaverse as its future (despite what the company’s name change two years ago might have meant). Meta has a massive global data center network at its core, giving millions of companies – especially small businesses – access to the masses. Don’t rule out the possibility of Meta having another great run in 2024.
2024 could usher in another boost in digital advertising activity
The Meta comes from CEO Mark Zuckerberg’s “Year of Efficiency” in which the company pledged to keep expenses under control after a pandemic-era spending spree. More on that in a bit, because one of the keys to Meta Stock’s continued success in 2024 will be the return of digital ad spending.
When the company reports fourth-quarter 2023 earnings on February 1, expect strong revenue growth to hog the spotlight. Management expected revenue to range from $36.5 billion to $40 billion, which would mean an increase of up to 24% compared to the fourth quarter of 2022. Meta continues to suffer from lower results in 2022 due to the decline in user activity at the height of the pandemic and the resulting of digital spending on its applications, as well as the effects appleThe privacy changes reduce Meta’s ability to monetize ads on the devices of fellow tech giants.
In addition, other companies involved in the digital advertising ecosystem – e.g Adobe And Sales forceboth of which help with marketing analytics and ad distribution, said Black Friday, Cyber Monday and holiday shopping in general hit new records in the final weeks of 2023. The two software giants reported mid- to high-single-digit increases in online shoppers’ spending compared to In 2022.
Meta is powering brand marketing for businesses all over the world – due to the incredible reach it offers with over 3.1 billion daily active users (as of Q3 2023). Early signs of strong consumer spending could mean big things for the social media company, which is using its data centers and new artificial intelligence (AI) algorithms to help marketers find an audience and make sales.
The second part of the “Year of Efficiency”?
Zuckerberg and his partners noted that they are pleased with the renewed success in 2023, and that the new operating methods will continue into 2024 and beyond. This means not only revenue growth, but more than that Profitable Revenue growth.
Cutting expenses, coupled with Meta’s stock buyback program, has already worked wonders. Earnings per share (EPS) in Q3 2023 were $4.39 – a massive 168% increase from the same quarter in 2022, and a 36% increase from Q3 2021 (peak pandemic EPS).
A similar pace of EPS increases is expected in the fourth quarter, and may continue into the new year. Hence, even though Meta has expensive inventory on the website backwards-On a consideration basis (31 times trailing 12-month EPS, 25 times trailing 12-month free cash flow), shares could actually be worth a straight ahead-Basis for consideration (20 times Wall Street analysts’ early 2024 EPS estimate, 21 times 2024 free cash flow estimate).
It’s never too late to invest in Meta stocks for the long term. The business is back on track with a focus on profitable growth, and its data and AI centers are unlocking healthy returns for marketing clients. Meta could be another notable winner in 2024.
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Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Nicholas Rossolillo and his clients hold positions at Apple, Meta Platforms, and Salesforce. The Motley Fool has positions in and recommends Adobe, Apple, Meta Platforms, and Salesforce. The Motley Fool recommends the following options: long January 2024 $420 calls on Adobe and short January 2024 $430 calls on Adobe. The Motley Fool has a disclosure policy.
Meta Platforms Stock Is Up Almost 200% in the Last Year – Is It Too Late to Buy for 2024? Originally published by The Motley Fool