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Meta Platforms, Inc. (META) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Meta Platforms (META - Free Report) ? Shares have been on the move with the stock up 2.5% over the past month. The stock hit a new 52-week high of $332.33 in the previous session. Meta Platforms has gained 173.6% since the start of the year compared to the 41.6% move for the Zacks Computer and Technology sector and the 49.9% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 25, 2023, Meta Platforms reported EPS of $4.39 versus consensus estimate of $3.62 while it beat the consensus revenue estimate by 2.07%.
For the current fiscal year, Meta Platforms is expected to post earnings of $14.18 per share on $133.4 billion in revenues. This represents a 44.25% change in EPS on a 14.4% change in revenues. For the next fiscal year, the company is expected to earn $17.49 per share on $151.14 billion in revenues. This represents a year-over-year change of 23.35% and 13.29%, respectively.
Valuation Metrics
Meta Platforms may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Meta Platforms has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 33.5X. On a trailing cash flow basis, the stock currently trades at 24.2X versus its peer group's average of 15.7X. Additionally, the stock has a PEG ratio of 1.09. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Meta Platforms currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Meta Platforms meets the list of requirements. Thus, it seems as though Meta Platforms shares could have potential in the weeks and months to come.
How Does META Stack Up to the Competition?
Shares of META have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is 8x8 Inc (EGHT - Free Report) . EGHT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. 8x8 Inc beat our consensus estimate by 55.56%, and for the current fiscal year, EGHT is expected to post earnings of $0.46 per share on revenue of $737.59 million.
Shares of 8x8 Inc have gained 12.9% over the past month, and currently trade at a forward P/E of 6.23X and a P/CF of 7.64X.
The Internet - Software industry is in the top 23% of all the industries we have in our universe, so it looks like there are some nice tailwinds for META and EGHT, even beyond their own solid fundamental situation.
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Meta Platforms, Inc. (META) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Meta Platforms (META - Free Report) ? Shares have been on the move with the stock up 2.5% over the past month. The stock hit a new 52-week high of $332.33 in the previous session. Meta Platforms has gained 173.6% since the start of the year compared to the 41.6% move for the Zacks Computer and Technology sector and the 49.9% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 25, 2023, Meta Platforms reported EPS of $4.39 versus consensus estimate of $3.62 while it beat the consensus revenue estimate by 2.07%.
For the current fiscal year, Meta Platforms is expected to post earnings of $14.18 per share on $133.4 billion in revenues. This represents a 44.25% change in EPS on a 14.4% change in revenues. For the next fiscal year, the company is expected to earn $17.49 per share on $151.14 billion in revenues. This represents a year-over-year change of 23.35% and 13.29%, respectively.
Valuation Metrics
Meta Platforms may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Meta Platforms has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 33.5X. On a trailing cash flow basis, the stock currently trades at 24.2X versus its peer group's average of 15.7X. Additionally, the stock has a PEG ratio of 1.09. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Meta Platforms currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Meta Platforms meets the list of requirements. Thus, it seems as though Meta Platforms shares could have potential in the weeks and months to come.
How Does META Stack Up to the Competition?
Shares of META have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is 8x8 Inc (EGHT - Free Report) . EGHT has a Zacks Rank of # 1 (Strong Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. 8x8 Inc beat our consensus estimate by 55.56%, and for the current fiscal year, EGHT is expected to post earnings of $0.46 per share on revenue of $737.59 million.
Shares of 8x8 Inc have gained 12.9% over the past month, and currently trade at a forward P/E of 6.23X and a P/CF of 7.64X.
The Internet - Software industry is in the top 23% of all the industries we have in our universe, so it looks like there are some nice tailwinds for META and EGHT, even beyond their own solid fundamental situation.