Meta Platforms (META) Underperforms Market: Insights for Investors

In the latest trading session, Meta Platforms (META) closed at $575.16, representing a slight decline of -0.23% from the previous trading day. This performance fell short compared to the S&P 500, which recorded a daily loss of 0.18%. The Dow Jones Industrial Average saw a decrease of 0.8%, while the Nasdaq, a technology-focused index, gained 0.27%.

Over the past month, Meta’s shares experienced a growth of 2.69%. However, this is lagging behind the broader Computer and Technology sector, which has risen by 6.6%, and the S&P 500, which increased by 4.46% during the same period.

Investors are keenly anticipating Meta's financial results set to be announced on October 30, 2024. The earnings per share (EPS) is projected to reach $5.17, indicating a significant 17.77% increase compared to the same quarter last year. Concurrently, the revenue forecast is estimated at $40.16 billion, reflecting a 17.6% improvement year-on-year.

For the entire year, Zacks Consensus Estimates predict an earnings figure of $21.43 per share and a total revenue of $161.84 billion. These numbers suggest an impressive increase of +44.12% in earnings and +19.97% in revenue from the previous year.

It is crucial for investors to monitor changes in analyst estimates for Meta Platforms. Recent revisions are indicative of current business trends, where positive changes in estimates typically signal an optimistic outlook for the company's performance.

Research has shown that these estimate revisions correlate strongly with short-term price movements. To leverage this, The Zacks Rank strategy has been developed, providing a straightforward rating system that accounts for these estimate fluctuations.

The Zacks Rank operates on a scale from #1 (Strong Buy) to #5 (Strong Sell), boasting a robust history of performance. Stocks rated #1 have demonstrated an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate for Meta has increased by 0.31%. Currently, Meta holds a Zacks Rank of #2 (Buy).

When it comes to stock valuation, Meta Platforms is currently trading at a Forward P/E ratio of 26.9. In contrast, its industry has an average Forward P/E ratio of 32.33, indicating that Meta may be trading at a discount relative to its peers.

Another metric to consider is the PEG ratio, which for Meta stands at 1.4. This ratio combines the company’s P/E with its expected earnings growth rate. The average PEG ratio for the Internet - Software industry was recorded at 2.19 at the last closing.

The Internet - Software industry falls under the larger Computer and Technology sector, which is highly regarded, holding a Zacks Industry Rank of 64, placing it in the top 26% of more than 250 industries.

It is important to note that the Zacks Industry Rank evaluates and categorizes industries based on the average Zacks Rank of their constituent companies. Research indicates that industries in the upper half of this ranking tend to outperform those in the lower half by a substantial margin.

For investors wishing to stay informed on these stock metrics and other important information, resources are available to assist in keeping track of evolving market conditions.

Meta, Stock, Earnings