Meta Stock Jumps on $40 Billion Buyback

Facebook owner Metaplatforms (META) reported late Wednesday fourth-quarter results that beat revenue as the company endures its toughest time since its founding 19 years ago. Meta stock skyrocketed as the company announced a $40 billion share buyback.


Additionally, Meta provided revenue guidance that exceeded estimates. For its first quarter, the company expects revenue of between $26 billion and $28.5 billion. The midpoint of $27.25 billion is higher than estimates of $27.1 billion.

The company reported adjusted earnings of $1.76 per share on revenue of $32.16 billion. Analysts were expecting $31.55 billion in revenue, according to FactSet. A comparison of earnings to analyst estimates was not immediately available due to the company’s reported restructuring charges.

Meta stock rose 18.8% to 181.82 during after-hours trading in the stock market today.

Difficult year for Meta

The earnings report comes after a very difficult year for Meta, which announced plans to cut 11,000 jobs in November. The job cuts affect 13% of Meta’s workforce. Meta also said it announced a $40 billion increase in its equity clearance on Wednesday.

Also, Meta claims to have reached a milestone.

“Our community continues to grow and I’m pleased with the strong engagement in our apps. Facebook just hit the 2 billion daily active milestone,” Meta Chief Executive Mark Zuckerberg said in a written statement with the earnings release. . Analysts had expected 1.99 billion.

Zuckerberg added, “Our management theme for 2023 is the ‘Year of Efficiency’ and we are focused on becoming a stronger, more agile organization.”

Like other social media companies, including Hurried (hurried), Etsy (ETSY) and Pinterest (PINS), Meta is challenged not only by macroeconomic weakness but also by a painful decline in digital advertising, which accounts for almost all of its revenues.

Further evidence of these challenges became apparent in Snapchat owner Snap’s fourth-quarter earnings report, which was hammered after disappointing results. The snap stock slumped about 10.3% to close at 10.37 am Wednesday.

Privacy Changes Addressed Meta Stock

Meta lost about $10 billion in ad revenue last year Apple (AAPL) has changed the privacy policies for the iPhone. That change made it more difficult to accurately target users with ads.

But the company has made technological improvements with its approach to advertising strategy. In a note to clients, Credit Suisse analyst Stephen Ju said he expects to see “gradual improvements in Meta dollar revenue growth.”

Meta also plans to pour billions into the development of the so-called metaverse.

Meta stock has a relative strength score of 72 out of 100.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more information on technology stocks, analysis and financial markets.


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