Meta Shares Soar 14% on Revenue Jump, Antitrust Win

Eileen AJ Connelly
·3 min read

Shares of Meta Platforms shot up more than 14% in morning trading Thursday after the parent of Facebook and Instagram reported a stronger-than-expected first quarter, and the company won dismissal of an antitrust suit brought by New York and other states.

The stock added $29.73, or 14.2%, to $239.13, after earlier spiking to $241.44, its highest point since January 2022.

After the market closed Wednesday, Meta reported that its revenue for the first quarter rose 3% from last year to $28.65 billion from $27.9 billion last year. That topped the estimate from analysts surveyed by Zack’s Investment Research by 4.21%.

Net income slid 24% to $5.71 billion, or $2.20 per share, in part reflected $1.14 billion in restructuring costs related to the company’s mass layoffs. Last year, the company posted profit of $7.47 billion, or $2.72 per share. Zack’s had the first quarter analyst forecast at $1.96 per share.

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Separately, a federal appeals court ruled early Thursday that New York and 47 other state attorneys general waited too long to sue Meta over its acquisitions of Instagram in 2012 and WhatsApp in 2014. The coalition of states sued in December 2020, arguing that the company then called Facebook bought out its rivals to eliminate competition. The U.S. Court of Appeals for the DC Circuit found that the states “unduly delayed” in bringing the suit, upholding a lower, Bloomberg reported.

Even before news of the court win broke, analysts issued a raft of positive comments about Meta’s results, including about 25 price target increases on the stock.

Citi analyst Ron Josey set one of the highest targets, $315, which means he expects the shares to rocket up more than 80% over the next year. The company remains Citi’s top online advertising pick, the analyst said in a research note that pointed to rising engagement and newer advertising products attracting more spending, along with a more streamlined company. “Meta’s momentum in Q1 can continue,” the analyst wrote, according to a summary on TheFly.com.

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Morgan Stanley analyst Brian Nowak, who set a $300 price target on Meta shares, pointed to Meta’s strong revenue guidance for the current quarter as suggesting that growth will accelerate. He also praised CEO Mark Zuckerberg’s efforts to streamline operations, and noted improving engagement on the company’s platforms, along with positive revenue trends from investments in AI and machine learning.

JPMorgan analyst Doug Anmuth, who raised his price target to $305, said the report shows the company’s commitment to cost discipline, even as it continues to invest in longer-term transformational technologies like artificial intelligence and the metaverse, according TheFly.com.

“This feels like early innings of Meta’s improved results,” wrote JMP Securities analyst Andrew Boone, as he raised his price target to $270, writing that momentum and execution are in Meta’s favor.