Meta Platforms: What A Difference Q4 Made; Now 20x P/E
(Preview) Company Update (META US) (Buy)
Summary
Meta stock is up 24% after ad revenues grew 2% in Q4 2022, much better than expected. We believe it now has a 20x P/E.
Reels appeared to have made good progress, and management has signaled that it is now ready to focus on monetization.
Management significantly reduced 2023 OpEx and CapEx guidance, and restated a commitment to cost efficiency and profit growth.
We expect Adjusted EBIT to shrink 17% in 2023, then resume its growth. The buyback program has been expanded to $50.9bn.
With shares at $190.20, we expect an exit price of $286 and a total return of 50% (15.0% annualized) by 2025 year-end. Buy.
Introduction
Meta Platforms Inc. released their Q4 2022 results after markets closed on Wednesday (February 1). META shares are up 24%, at $190.20, as of 12:15 Eastern Standard Time, returning to their level last June.
With this rebound, Meta’s share price has returned to 11% above the level at our initiation in March 2019, though it remains 30% lower than at the start of 2021.
Meta ad r…