Meta Platforms (META) Registers a Bigger Fall Than the Market: Important Facts to Note

In the latest close session, Meta Platforms (META) was down 1.84% at $592.92. This change lagged the S&P 500's 0.37% loss on the day. At the same time, the Dow lost 0.18%, and the tech-heavy Nasdaq lost 0.84%.

The social media company's shares have seen a decrease of 5.21% over the last month, not keeping up with the Computer and Technology sector's loss of 2.83% and the S&P 500's loss of 3.7%.

Investors will be eagerly watching for the performance of Meta Platforms in its upcoming earnings disclosure. The company is predicted to post an EPS of $6.67, indicating a 3.73% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $55.34 billion, reflecting a 30.78% rise from the equivalent quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $29.75 per share and a revenue of $249.25 billion, representing changes of +26.65% and +24.02%, respectively, from the prior year.

Any recent changes to analyst estimates for Meta Platforms should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.2% downward. At present, Meta Platforms boasts a Zacks Rank of #3 (Hold).

Looking at valuation, Meta Platforms is presently trading at a Forward P/E ratio of 20.31. For comparison, its industry has an average Forward P/E of 19.39, which means Meta Platforms is trading at a premium to the group.

We can also see that META currently has a PEG ratio of 0.93. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 1.09 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 159, putting it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow META in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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