META's Next Big Test: Previewing Its Fast-Approaching Q3 Earnings

Core Viewpoint - Meta Platforms is set to report its Q3 earnings on October 29, alongside Alphabet and Microsoft, which could lead to significant market movements [3][4]. Financial Performance Expectations - Analysts project Meta will generate sales of $49.34 billion for Q3, reflecting a growth rate of just under 22%, similar to the previous quarter's growth rate [5]. - The expected adjusted EPS is $6.74, indicating a growth rate of 12%, following a trend of over 35% growth in the last four quarters [6]. - The company needs to maintain ad impression delivery growth and average price per ad at or above 10%, with last quarter's figures at 11% and 9% respectively [7]. Product Developments - Meta's new AI glasses, released on September 30, will not contribute to Q3 financials, but management's commentary on product adoption could influence stock performance [8][9]. Stock Performance and Market Sentiment - Meta shares have seen a decline of over 5% since the last earnings report, closing at around $732 on October 20, with a forward P/E ratio contracting from 27.5x to 25.5x [10]. - If shares remain near or below $770 before the earnings release, market expectations may align with Wall Street estimates, but significant scrutiny is anticipated due to prior price increases [11]. - The company has provided a total return of around 25% year-to-date, but shares have stagnated recently compared to Alphabet's 35% surge [13].