Meta Plummets as Capex Plans Spur Downgrades
Comment of the Day

October 27 2022

Commentary by Eoin Treacy

Meta Plummets as Capex Plans Spur Downgrades

This note may be of interest to subscribers. Here are some relevant quotes:

Jefferies (buy, PT $200)
There are “no signs of expense discipline,” and this is “going against what investors want”

Vital Knowledge
The expense outlook is “the big negative” of the report; “investors were hoping for mgmt. to aggressively slash costs, but it doesn’t seem like that’s happening”

The results and outlook “weren’t great, but neither was any worse than SNAP or GOOGL”

Truist Securities (buy, PT $240)
The revenue outlook is “still decent all things considered,” but the guidance for total expenses is “materially higher than our estimate”

Eoin Treacy's view

There is only so much money available to be spent on advertising. Over the last decade, the number of companies seeking to suckle on the ad spend of the corporate sector has grown considerably. The net effect today is many new companies are basing their business models on offering advertising space.

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