Meta Stock Gets Unfriended Premarket After Q3 Print: What's Going On?

Shares of Meta Platforms, Inc. META declined in premarket trading despite the company surpassing expectations with its third-quarter results. 

The company, led by Mark Zuckerberg, reported Q3 revenue of $34.15 billion, marking a 21% constant-currency revenue growth, beating a Wall Street estimate of $31.65 billion.

Earnings per share stood at $4.39, also beating the consensus estimate. The flagship Facebook app had 2.09 billion daily active users, slightly ahead of KeyBanc’s projection of 2.07 billion.

The stock drop after the earnings call seemed to be linked to comments made by CFO Susan Li. She mentioned that geopolitical tensions in the Middle East had softened ad revenue at the start of the quarter. Nevertheless, she clarified that this softness was considered when providing fourth-quarter revenue guidance.

Gary Black from Future Fund stated that the selloff was not justified, as the fourth-quarter revenue guidance of $36.5 billion to $40 billion aligned with the consensus estimate of $38.5 billion.

KeyBanc analyst Justin Patterson emphasized the positive aspect of Reels breaking even earlier than expected. He also highlighted that AI remains a growth driver, and business messaging is poised to become a major growth pillar.

Patterson increased his earnings per share estimates for fiscal years 2023 through 2025 and raised his price target from $356 to $380, maintaining an Overweight rating for the stock.

In premarket trading, Meta shares fell 2.85% to $291, according to Benzinga Pro data.

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