Wall Street has got carried away with its hopes for Facebook-owner Meta Platforms. That’s the message from analysts at Benchmark Research, who are calling a top for the social-media company’s rally.
Analysts have warmed to the stock and CEO Mark Zuckerberg after he pledged a total of 21,000 job cuts in recent months. However, Benchmark’s Mark Zgutowicz says those cuts are likely to hit revenue.
“Meta’s…
Wall Street has got carried away with its hopes for Facebook-owner
Meta
Platforms. That’s the message from analysts at Benchmark Research, who are calling a top for the social-media company’s rally.
Analysts have warmed to the stock and CEO Mark Zuckerberg after he pledged a total of 21,000 job cuts in recent months. However, Benchmark’s Mark Zgutowicz says those cuts are likely to hit revenue.
“Meta’s meaningful rally since forward revenue revisions and the stock bottomed
last November (post 3Q earnings miss) is over,” Zgutowicz wrote in a research note on Friday. “It’s time to lighten the load on a misperceived safe play in a troubled macro [environment].”
Benchmark forecasts Meta revenue will fall 2% this year compared with consensus expectations for 5% growth, arguing the company historically has a high correlation between revenue and its number of employees.
Benchmark has a Hold rating on Meta stock. Meta shares were down 0.1% in premarket trading, having risen 73% this year so far.
Advertisement – Scroll to Continue
The bearish call makes Benchmark a rarity in recent weeks, as analysts have rushed to upgrade Meta. The stock received a boost on Thursday from a raised target price at
Credit Suisse
,
which expects Meta to benefit from advertising revenue growth.
Among analysts polled by FactSet, 39 analysts, or 71%, have a Buy rating or equivalent on Meta stock, while 11 have Hold ratings and five have a Sell rating or equivalent.
Write to Adam Clark at [email protected]
— to www.barrons.com
:no_upscale()/cdn.vox-cdn.com/uploads/chorus_image/image/72340170/1429492845.0.jpg)
