Meta Platforms (META) Anticipates Earnings Growth: Key Expectations for Upcoming Report

Meta Platforms (META) is set to report its earnings for the quarter that ended in September 2024, and the market is predicting a notable rise in earnings on the back of increased revenues. This anticipation is crucial as it affects the company’s earnings outlook. A key aspect to consider is how the actual results will compare to the current estimates since this could sway the stock price in the near term.

The earnings report is scheduled to be announced on October 30. If Meta's reported figures exceed expectations, the stock price could see a positive uptick. Conversely, failure to meet these predictions may lead to a decrease in stock value.

The immediate reaction to the earnings report will largely depend on management's comments regarding the company's business conditions during the earnings call. Therefore, it's essential to assess the potential for a positive surprise in EPS (earnings per share).

Consensus Estimate Insights

For the upcoming quarter, analysts are expecting Meta to report earnings of $5.17 per share, which reflects a year-over-year growth of 17.8%. The revenue for this period is anticipated to be around $40.16 billion, marking a 17.6% increase compared to the same quarter last year.

Trends in Estimate Revisions

Over the past 30 days, analysts have revised their consensus EPS estimate upwards by 0.81%. This trend indicates a more positive outlook among analysts regarding Meta's earnings potential during this quarter.

Understanding Earnings Whisper

Estimate revisions provide clues about the business conditions leading up to the earnings release. The Zacks Earnings ESP (Expected Surprise Prediction) model helps in evaluating these expectations. It compares the Most Accurate Estimate to the Zacks Consensus Estimate. Analysts updating their estimates close to the earnings release often do so with the latest information, which can yield a more accurate prediction compared to earlier consensus estimates.

A positive Earnings ESP can indicate a higher likelihood of an earnings beat, especially when paired with a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold). Research shows that stocks in this combination tend to produce positive surprises around 70% of the time.

On the flip side, a negative Earnings ESP reading doesn’t guarantee an earnings miss; however, it signals that predicting a beat may be more challenging.

Current Outlook for Meta Platforms

For Meta Platforms, the Most Accurate Estimate exceeds the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.83%. With a Zacks Rank of #2, this combination strongly suggests that Meta is likely to outperform the consensus EPS estimate.

What the Earnings Surprise History Indicates

Reviewing Meta's history can provide insights regarding future estimates. For instance, in the last quarter, analysts anticipated earnings of $4.70 per share, yet the company surpassed expectations with actual earnings of $5.16, leading to a surprise of +9.79%. Over the past four quarters, Meta has consistently exceeded consensus EPS estimates.

Final Thoughts

While an earnings beat or miss may influence stock price movement, other factors can also play a significant role. Stocks can still decline despite positive earnings due to other disappointing aspects, and some stocks may rise even with a miss due to unexpected positive developments.

Investing in companies that are forecasted to beat earnings can improve the chances of success. Therefore, reviewing a company's Earnings ESP and Zacks Rank is beneficial before earnings announcements. Meta Platforms appears to be a strong candidate for exceeding earnings expectations, but investors should remain aware of additional factors that may impact their decisions prior to the earnings release.

Industry Highlights

In the same industry, Paypal (PYPL) is also preparing to report its earnings soon, with expected earnings of $1.08 per share for the quarter ended September 2024, reflecting a year-over-year decline of 16.9%. Its anticipated revenues are expected to reach $7.86 billion, indicating a 5.9% increase from the previous year. The consensus EPS estimate for Paypal has seen a 1.2% upward revision in the last month, leading to an Earnings ESP of 1.92% alongside a Zacks Rank of #3 (Hold). This suggests that Paypal, too, is likely to beat its consensus EPS estimate.

Stay informed about upcoming earnings reports with the appropriate earnings calendars.

Meta, Earnings, Growth