Meta Platforms shares rise on Tuesday as Credit Suisse cuts earnings estimates

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Meta Platforms ($NASDAQ:META) shares rose on Tuesday as investment firm Credit Suisse cut its earnings estimates, but said the news flow for the tech giant should “get better from here.” Analyst Stephen Ju lowered his earnings per share estimates for 2022 and 2023 to $13.74 and $14.24, down from $14.25 and $15.25, but noted that there is the potential for “better than-expected ad revenue growth” in some products such as Meta Platforms Shops, Search in Marketplaces, even if there are worries over the monetization of Reels. “Reels monetization will hence be less about user demand but rather a function of ongoing user experience improvement through investments in AI and ensuring small and medium business adoption in lockstep with larger advertisers,” Ju wrote in a note to clients. Nonetheless, monetization of Reels was recently highlighted as a priority for the second-half by Chris Cox, the company’s Chief Product Officer. It is unclear how this will affect Meta Platforms’s market and earnings in the long term.
However, it is worth noting that Credit Suisse is still bullish on the stock, despite lowering its estimates. This could mean that there is still potential for growth in the company.

Market Reaction

The current media coverage of Meta Platforms is mostly negative. However, on Tuesday the stock opened at $170.4 and closed at $175.8, rising by 5.1% from the prior closing price of 167.2. This shows that investors are not too worried about the negative press and are still confident in the company.

VI Analysis

Company’s fundamentals reflect its long term potential, below analysis on Meta Platforms are made simple by VI app. Based on VI Risk Rating, Meta Platforms is a low risk investment in terms of financial and business aspects. You may look at what are the business and financial areas presenting potential risks in our website.

Summary

Despite the negative news, the stock price rose by 5.1% the following day. Investors may be attracted to Meta Platforms due to its strong growth potential. In addition, Meta Platforms is expanding into new areas such as virtual reality and artificial intelligence.
However, there are also risks to investing in Meta Platforms. The company faces regulatory scrutiny, and its stock price is already quite high. Investors should carefully consider these factors before deciding whether to invest in Meta Platforms.