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Meta Platforms, Inc. (META) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Meta Platforms (META - Free Report) ? Shares have been on the move with the stock up 12.7% over the past month. The stock hit a new 52-week high of $583.04 in the previous session. Meta Platforms has gained 62.9% since the start of the year compared to the 23% move for the Zacks Computer and Technology sector and the 22.4% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 31, 2024, Meta Platforms reported EPS of $5.16 versus consensus estimate of $4.7.
For the current fiscal year, Meta Platforms is expected to post earnings of $21.36 per share on $161.62 billion in revenues. This represents a 43.64% change in EPS on a 19.8% change in revenues. For the next fiscal year, the company is expected to earn $24.10 per share on $184.04 billion in revenues. This represents a year-over-year change of 12.8% and 13.88%, respectively.
Valuation Metrics
Meta Platforms may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Meta Platforms has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 27X current fiscal year EPS estimates, which is not in-line with the peer industry average of 30.5X. On a trailing cash flow basis, the stock currently trades at 29.2X versus its peer group's average of 24.4X. Additionally, the stock has a PEG ratio of 1.42. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Meta Platforms currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Meta Platforms fits the bill. Thus, it seems as though Meta Platforms shares could still be poised for more gains ahead.
How Does META Stack Up to the Competition?
Shares of META have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Upland Software, Inc. (UPLD - Free Report) . UPLD has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of F, and a Momentum Score of A.
Earnings were strong last quarter. Upland Software, Inc. beat our consensus estimate by 26.67%, and for the current fiscal year, UPLD is expected to post earnings of $0.73 per share on revenue of $274.83 million.
Shares of Upland Software, Inc. have gained 11.9% over the past month, and currently trade at a forward P/E of 3.22X and a P/CF of 0.32X.
The Internet - Software industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for META and UPLD, even beyond their own solid fundamental situation.
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Meta Platforms, Inc. (META) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Meta Platforms (META - Free Report) ? Shares have been on the move with the stock up 12.7% over the past month. The stock hit a new 52-week high of $583.04 in the previous session. Meta Platforms has gained 62.9% since the start of the year compared to the 23% move for the Zacks Computer and Technology sector and the 22.4% return for the Zacks Internet - Software industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 31, 2024, Meta Platforms reported EPS of $5.16 versus consensus estimate of $4.7.
For the current fiscal year, Meta Platforms is expected to post earnings of $21.36 per share on $161.62 billion in revenues. This represents a 43.64% change in EPS on a 19.8% change in revenues. For the next fiscal year, the company is expected to earn $24.10 per share on $184.04 billion in revenues. This represents a year-over-year change of 12.8% and 13.88%, respectively.
Valuation Metrics
Meta Platforms may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Meta Platforms has a Value Score of C. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 27X current fiscal year EPS estimates, which is not in-line with the peer industry average of 30.5X. On a trailing cash flow basis, the stock currently trades at 29.2X versus its peer group's average of 24.4X. Additionally, the stock has a PEG ratio of 1.42. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Meta Platforms currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Meta Platforms fits the bill. Thus, it seems as though Meta Platforms shares could still be poised for more gains ahead.
How Does META Stack Up to the Competition?
Shares of META have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Upland Software, Inc. (UPLD - Free Report) . UPLD has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of F, and a Momentum Score of A.
Earnings were strong last quarter. Upland Software, Inc. beat our consensus estimate by 26.67%, and for the current fiscal year, UPLD is expected to post earnings of $0.73 per share on revenue of $274.83 million.
Shares of Upland Software, Inc. have gained 11.9% over the past month, and currently trade at a forward P/E of 3.22X and a P/CF of 0.32X.
The Internet - Software industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for META and UPLD, even beyond their own solid fundamental situation.