Meta CEO Mark Zuckerberg attends a Senate Judiciary Committee hearing on online child sexual exploitation at the U.S. Capitol on January 31, 2024 in Washington, United States.
Nathan Howard | Reuters
Yuan Shares fell 12% Thursday morning after the company issued weak revenue guidance that overshadowed first-quarter earnings. At 10 a.m. ET, the stock was trading at about $435, compared with the closing price of $493.5 before the earnings report on Wednesday, wiping out about $148 billion in market value.
On Wednesday, Meta reported quarterly earnings of $4.71 per share on revenue of $36.46 billion, beating expectations for earnings of $4.32 per share on sales of $36.16 billion.
The stock sell-off gathered pace in intraday trading Wednesday after Chief Executive Mark Zuckerberg discussed spending in areas such as artificial intelligence and mixed reality that are not yet profitable.
The company expects second-quarter revenue of $36.5 billion to $39 billion. The midpoint of that range was $37.75 billion, below analysts’ average estimate of $38.3 billion.
JPMorgan analysts reiterated their overweight rating on Meta while lowering their target price to $480 from $535, citing the company’s growing investments in artificial intelligence, which they believe may eventually pay off.
“Meta’s virtual ownership of the social graph, strong competitive moat and focus on user experience position it as a durable blue-chip company with long-term growth,” they wrote in a note Thursday.
Bernstein analysts retained an outperform rating on Meta stock, lowering their price target to $565 from $590 and describing the company’s current business strategy as an “expensive offensive” with a long payback period.
“We have uncertainty, but Meta deserves to retain its elevated price-to-earnings ratio here,” they wrote in a Wednesday note. “Without sounding too pious, you either believe in Zack or you don’t, and we believe.”
Barclays analysts maintained an overweight rating on Meta stock in an investor note Wednesday and lowered their price target to $520 from $550. They reiterated their confidence in the “long-term name,” although they expect “a bumpy ride through the remainder of 2024 as revenue growth slows significantly.”
“If META has proven anything over the years, it’s that its ability to execute during big platform shifts in technology is exceptional, arguably among the best,” Barclays analysts wrote. “We didn’t listen to Zuckerberg. to any news that causes significant concern.”
—CNBC’s Michael Bloom contributed to this report.
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