Key Takeaways
- Meta Platforms is set to release its first-quarter 2024 earnings after the bell on Wednesday.
- Analysts see Meta's revenue and income rising from the prior-year period but falling from the previous quarter.
- Analysts expect Meta to report strong ad revenue growth for the latest quarter.
- Meta could provide updates about its artificial intelligence (AI) initiatives and how AI is affecting its business segments.
Analysts and investors will be watching Meta Platforms' (META) advertising revenue growth and seeking updates about the impact of artificial intelligence (AI)technology when it reports earnings for the first quarter of 2024 on Wednesday after the closing bell.
Analysts project Meta's revenue to be $36.27 billion for the first quarter of 2024, down from the previous quarter but up from $28.65 billion in the same period in 2023, according to estimates compiled by Visible Alpha.
Net income is expected to be $11.35 billion, a decline from the fourth quarter but an increase from $5.71 billion in Q1 2023. Dilutedearnings per share (EPS)are projected at $4.34, compared with $2.20 in the same period a year earlier.
| Analyst Estimates for Q1 2024 | Q4 2023 | Q1 2023 | |
| Revenue | $36.27 billion | $40.11 billion | $28.65 billion |
| Diluted Earnings Per Share | $4.34 | $5.33 | $2.20 |
| Net Income | $11.35 billion | $14.02 billion | $5.71 billion |
Key Metric: Ad Revenue Growth
Analysts are watching for strong growth in Meta's advertising revenue.
CFRA analysts project that Meta's first-quarter earnings report could show advertising revenue will grow 26%, which "likely mark[s] a peak growth rate." The analysts said that healthy digital ad spend, AI integration, and strength from Chinese advertisers could be drivers for ad growth, but noted that they "partly attribute the strong growth rate to lapping a low bar a year ago."
Wedbush Securities analysts increased the company's price target to $570 from $520, citing the pace of anticipated growth compared with competitors, improvements in monetization, changes in demand from advertisers in China, impacts of AI initiatives, and expected operating margin expansion in 2024. The analysts wrote that they "see a strengthening digital advertising environment heading into 1Q results," highlighting Meta and Alphabet(GOOGL) as major benefactors.
Jefferies research analysts said that Meta "could capture 50% of incremental industry ad dollars in 2024, which would be its highest ever and well above its 33% in 2023" as "scaling Gen AI ad tools supplement Meta's already best-in-class Advantage+ [advertising] product suite." Meta's ad business in 2024 could also outgrow Amazon's (AMZN) for the first time since 2015," they said.
Business Spotlight: Updates on AI Initiatives
Meta could offer updates with its first-quarter earnings about how it has integrated AI into to its ranking and recommendation engines. The company recently unveiled its latest customAI chip, the Next Gen Meta Training and Inference Accelerator (MTIA).
The company also could give investors updates about its continuing AI initiatives and how they are affecting Meta's bottom line.
Meta shares were down 0.9% at $491.54 Wednesday as of 2 p.m. ET and have gained about 39% so far this year.
UPDATE—April 24, 2024: This article has been updated to reflect more recent unadjusted analyst estimates and share price information.
Correction—April 24, 2024: This article has been updated to reflect unadjusted analyst estimates for past figures.
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Meta Platforms. "Meta To Announce First-Quarter 2024 Results."
CFRA. "THEMATIC RESEARCH META PLATFORMS Q1 PREVIEW - BEATING ANOTHER LOW BAR."
Wedbush Securities. "Digital Advertising - 1Q24 Digital Advertising Preview."
Jefferies. "Meta Platforms - Rising Above Ad Peers with a Mega Moat."
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