Brief:
- Meta Stock Fall by over 15% during after-hours trading on Wednesday.
- Meta delivered first-quarter results that surpassed expectations, yet the stock faced a decline due to a subdued revenue forecast.
- Investor expectations have been raised by Meta's impressive performance, with the stock tripling in value last year and increasing by 40% thus far in 2024.
- The company's headcount decreased by 10% compared to the previous year, totaling 69,329 employees.
Meta Stock Plunge After Q1
Meta Stock plummeted by over 15% during after-hours trading on Wednesday following the release of a disappointing forecast, which overshadowed the company's stronger-than-anticipated first-quarter performance.
In comparison to the same period last year, revenue surged by 27%, marking the fastest expansion rate since 2021, totaling $28.65 billion. Net income more than doubled, reaching $12.37 billion, or $4.71 per share, up from $5.71 billion, or $2.20 per share, a year ago.
Meta Stock Slides Despite Q1 Earnings, Sales Beat https://t.co/jHVshzmPjl
— Investors.com (@IBDinvestors) April 24, 2024
Source: Twitter/Investors.com
Financial Insights and Future Projections
One contributing factor to the significant increase in net income is the simultaneous acceleration in revenue growth and a 16% reduction in sales and marketing expenses compared to the previous year.
Meta's projection for second-quarter sales ranges from $36.5 billion to $39 billion. At the midpoint of this range, $37.75 billion, the anticipated 18% year-over-year growth falls short of analysts' average prediction of $38.3 billion.
During the earnings call, the decline in stock value intensified as CEO Mark Zuckerberg delved into the company's investments, particularly in areas like glasses and mixed reality, where Meta is currently not generating revenue.
Meta no longer discloses metrics for daily and monthly active users, instead opting for a figure termed "family daily active people."
In March 2024, this metric stood at 3.24 billion, reflecting a 7% increase from the previous year.
Financial Performance and Strategic Investments
The company's strong financial performance in recent quarters has heightened investor expectations, resulting in significant stock gains.
Meta Stock has surged approximately 40% this year, following nearly a tripling in value the year prior. In February 2023, CEO Mark Zuckerberg signaled a focus on efficiency, which sparked investor enthusiasm.
Zuckerberg pledged to streamline operations by axing unnecessary projects and reducing bloat, aiming to make Meta a more agile organization.
The company shed around 21,000 jobs in the first half of 2023, and Zuckerberg indicated a cautious approach to hiring moving forward, stating that new hires would be relatively scarce compared to previous practices.
In the first quarter of this year, Meta's headcount dropped by 10% compared to the previous year, totaling 69,329 employees.
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