Opposition to metaverse spending is weakening, stock recovery indicates, but social media still needs to bring in the bucks.
The key number that investors will be looking at for Q4, according to Shmulik, will be the free cash flow
per share, an indicator of the company’s financial flexibility. Investors will be closely looking at the company’s cash management in light of the uncertain economy and its effect on advertising revenue. Analysts are not expecting much in the way of FCF, other than it remain positive, according to data from FactSet. On a per share basis it is expected to come in at 3 cents, down from 6 cents in Q3. Meta used to be an FCF powerhouse, with annual per share figures of $13.70 in 2021 and $8.19 in 2020 but the full-year 2022 figure will come in around $4.65, FactSet calculates. For the rest of the year, analysts are expecting FCF of 55 cents a quarter or better.
Still, investors were willing to pay 26 times its free cash flow for the quarter, compared with 17.71 times for the Communication Services Select Sector exchange-traded fund. Shmulik attributes this premium to the layoffs and other cost cuts announced after the poor Q3 results.Follow me on
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