Meta Platforms forecasted a dismal holiday-quarter
You might have heard that Facebook-parent Meta Platforms Inc (NASDAQ:FB) is tanking this morning after earnings, last seen down 22.5% to trade at $100.60. While Meta Platforms' revenue of $27.71 billion came in above estimates, the social media concern issued a weaker-than-expected fourth-quarter forecast.
On top of the disappointing outlook, META is being pressured by earnings of $1.64 per share that whiffed on estimates, as well as massive spending on the Metaverse, slow global economic growth, competition from TikTok, and regulation risks. There was pain everywhere you looked.
At the end of last week, Meta Platforms stock dipped back towards its Oct. 13, four-year low of $122.53 after Snap (SNAP) issued its own disappointing forecast. Now trading at its lowest level in seven years, META is 70.6% lower year-to-date.
The brokerage bunch was quick to respond to the event, with more than 20 analysts issuing bear notes after the results dropped. Morgan Stanley cut its rating on Meta Platforms stock to "equal-weight" from "overweight," and slashed its price target by $100 to $105. Similarly, Cowen and Company downgraded META to "market perform" from "outperform," and adjusted its target price to $135 from $205.
Unsurprisingly, options traders have something to say as well. Today's options pits show ample activity from both sides of the aisle, though bulls are edging out bears. Within the first half hour of trading, more than 268,000 calls and 180,000 puts have been exchanged, which is 10 times the intraday average. The most popular contract is the weekly 10/28 100-strike call, followed by the 110- and 105-strike calls from the same series, with positions being opened at all three.