Meta Platforms: Revenue Upside In The Social Media Empire Looks Exhausted

Summary:

  • Meta Platforms is expected to meet or exceed Q3 earnings estimates due to strong advertising trends and CPM growth, but Q4 guidance may be weaker.
  • Building on strong monetization, negative DAU growth for Facebook and Instagram suggests potential over-monetization, which could impact long-term user experience and revenue growth.
  • I think Meta’s growth outlook is increasingly challenged, with the two main revenue drivers showing stretched levels: slowing DAU growth and stretched DAU monetization.
  • Meta shares have outperformed the market, up 67% YTD, and are now likely trading at a premium to fair value, suggesting it might be prudent to trim exposure. Hold.
Meta European head office

Derick Hudson

Meta Platforms (NASDAQ:META) (NEOE:META:CA) is set to publish earnings for the September quarter on October 30th, after the market closes, and consensus estimates call for approximately $40.3 billion of revenues and $16 billion of operating profits. In my view, estimates for Q3 look


Analyst’s Disclosure: I/we have a beneficial long position in the shares of META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Not financial advice.

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