Meta Platforms Inc

Meta Platforms, Inc. (NASDAQ: META) builds technology that helps people connect and share, find communities, and grow businesses. The Company’s products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, and wearables. It operates through two segments: Family of Apps (FoA) and Reality Labs (RL).

Recent Financial and Business Updates:

• First Quarter 2024 Operational and Financial Highlight
  • Performance of Meta's Family of Apps: In March 2024, Meta's Family daily active people (DAP) averaged 3.24 billion, marking a significant 7% year-over-year increase. Ad impressions across Meta's Family of Apps surged by 20% compared to the previous year, while the average price per ad demonstrated steady growth, increasing by 6% year-over-year.
  • Revenue and Expenses: Total revenue for Meta reached USD 36.46 billion, with revenue on a constant currency basis at USD 36.35 billion, both reflecting a robust 27% year-over-year increase. Total costs and expenses amounted to USD 22.64 billion, showing a modest 6% year-over-year increase. Meta's capital expenditures, inclusive of principal payments on finance leases, totaled USD 6.72 billion.
  • Capital Return Program and Financial Position: As part of Meta's capital return program, the company allocated USD 14.64 billion towards share repurchases of its Class A common stock, coupled with dividend payments amounting to USD 1.27 billion. Cash, cash equivalents, and marketable securities stood at USD 58.12 billion as of March 31, 2024, while free cash flow amounted to USD 12.53 billion. Additionally, Meta's headcount as of the same date was 69,329, reflecting a 10% decrease year-over-year. 

• Outlook Commentary
  • Revenue and Expenses Outlook: For the second quarter of 2024, Meta anticipates total revenue to range between USD 36.5 billion and USD 39 billion, with foreign currency expected to pose a 1% headwind to year-over-year total revenue growth. However, total expenses for the full year are revised to be within the range of USD 96 billion to USD 99 billion, up from the previous outlook, primarily due to increased infrastructure and legal costs.
  • Capital Expenditures and Tax Rate: Meta projects its full-year 2024 capital expenditures to fall between USD 35 billion and USD 40 billion, reflecting an upward adjustment to support accelerated infrastructure investments, particularly geared towards advancing its artificial intelligence (AI) roadmap. The company anticipates the full-year 2024 tax rate to be in the mid-teens barring any changes to the tax landscape.
  • Regulatory Landscape and Business Momentum: Meta remains vigilant amid an evolving regulatory landscape, particularly in the EU and the U.S., which may impact its business and financial outcomes. Despite these challenges, the first quarter of 2024 demonstrated promising momentum within Meta's Family of Apps, with significant strides made in its AI and Reality Labs initiatives, poised to revolutionize user interactions with its services in the years ahead. 

Technical Observation (on the daily chart)

The Relative Strength Index (RSI) over a 14-day period stands at 32.07, currently downward trending towards oversold zone, with expectations of some consolidation or a small upward recovery. Moreover, the price is currently positioned between both the 50-day SMA and 200-day SMA trend-following indicators, which may act as dynamic short-term resistance and support levels respectively.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is April 26, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.