Meta stock price hits record high: Q4 earnings forecast and performance analysis

Meta’s earnings date and expectations

​Meta reports fourth quarter (Q4) earnings on 2 February, 8am AEDT after market close. Expectations are for $4.95 in earnings per share (EPS), and $39 billion in revenue.

Skyrocketing success: Meta's 194% stock surge in 2023

​The tech giant saw a staggering 194% jump in its stock price in 2023, a testament to the company's robust performance in key areas such as user growth, engagement, and monetization—all achieved with a leaner operation.

​The surge in Meta's stock can primarily be attributed to significant improvements in user engagement. The company's platforms have seen a consistent increase in active users, which translates to a wider audience for advertisers to target. This growth in user base is a clear indicator that the company continues to innovate and remain relevant in the ever-changing social media landscape.

Revolutionising engagement: how Meta’s Reels and AI propel growth

​Furthermore, Meta's monetization strategies have proven to be highly effective. One of the key drivers of this success has been the company's focus on Reels, its short-form video feature that competes with the likes of TikTok. Reels has not only captured the attention of users but also that of advertisers. The increasing attraction of advertisers to this feature suggests that Meta has successfully created a new revenue stream that is likely to have a positive impact on its advertising revenue, especially after a period of neutral and even negative impacts in previous quarters.

​Another factor contributing to Meta's success is its investment in data analytics, campaign planning, and measurement tools powered by artificial intelligence (AI). These advanced tools enable advertisers to target their campaigns more effectively, ensuring better returns on investment.

​An important aspect of the trading landscape is the pricing of ads. Data indicates that ad prices have seen an increase from the previous year, which is a positive sign for social media companies like Meta. Higher ad prices can lead to increased revenue, which in turn can drive stock prices up.

Navigating market dynamics: Meta's strategic adaptation amidst economic shifts

​However, traders should always be aware of the broader economic context in which companies operate. While Meta's performance has been strong, forecasts by entities like Morningstar suggest a deceleration in revenue growth in 2024. As the transition from traditional to digital advertising nears completion, the explosive growth rates seen in recent years may not be sustainable. Additionally, projections of a slowdown in U.S. economic growth in 2024 could impact advertising budgets and, consequently, Meta's revenue.

​On the operational front, Meta has indicated a slowdown in hiring. This strategic decision aligns with the company's efforts to boost efficiency and productivity among its existing workforce rather than expanding headcount significantly.

Analyst ratings for Meta

​Refinitiv data shows a consensus analyst rating of ‘buy’ for Meta with 19 strong buy, 33 buy, 7 hold and 2 sell – and a mean of estimates suggesting a long-term price target of $372.40 for the share, roughly 3% higher than the current price (as of 22 January 2024).

​Refinitiv analyst data

Meta technical outlook

​Meta’s share price is in the process of making a new all-time record high by overcoming its August 2021 peak at $384.33, a rise and weekly chart close above which would engage the minor psychological $400 mark.

​The Meta share price is on track for its third straight week of gains with it retaining a strongly bullish outlook while it remains above its last reaction low, a low on the daily candlestick chart which is lower than the one on the preceding and the following days. This was made at $358.61 on Wednesday the 17 January.

​Meta weekly chart

​The fact that the Meta share price gapped higher twice since last Wednesday is positive for the bulls as it shows how strong the buying pressure currently is.

​​While the October-to-January uptrend line at $353.51 and, more importantly the second to last reaction low on the 2 of January at $340.01 underpin, the current medium-term bullish outlook remains in play.

​Meta daily chart