The metaverse, digital ads to get attention with Meta's earnings report
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Facebook parent company Meta Platforms (NASDAQ:FB) will take the earnings spotlight, Wednesday, as the social-media giant is set to deliver its fourth-quarter earnings results after the close of trading.
With its report, Meta (FB) will give some insight into its plans for the metaverse, which Chief Executive Mark Zuckerberg began touting last year as one of the company's main areas of future growth. As part of its metaverse focus, Meta (FB) will for the first time report the results of Reality Labs, the company's augmented and virtual-reality hardware unit. The company has said that Reality Labs won't be profitable for the foreseeable future.
Analysts are also likely to key in on what Meta (FB) has to say about its digital advertising business. Last fall, the company warned that its digital ad revenue would be impacted by privacy changes that Apple (NASDAQ:AAPL) has implemented and which make it more difficult for companies to target and measure ads that run on Facebook and Instagram.
Stifel analyst Mark Kelley on Tuesday resumed coverage of Meta's (FB) with a buy rating and $400-a-share price target. Kelley said with regards to Meta, "headlines around privacy, anti-trust and regulation are here for the long haul," but that he still see Meta (FB) as "the most scaled and sophisticated digital company" that he covers.
For Meta's fourth quarter, analysts estimate the company will earn $3.83 a share, on revenue of $33.44 billion.
Prior to Meta's (FB) report, Jefferies analyst said in a research report that big digital ad players such as Meta and Google (NASDAQ:GOOG) are facing some tough times, but earnings still have the potential to exceed expectations.