Applied Finance Capital Management LLC has reduced its stake in Meta Platforms, Inc. (NASDAQ:META) by 14.5% during the third quarter of 2023. According to its recent Form 13F filing with the Securities and Exchange Commission, the firm owned 55,048 shares after selling 9,366 shares. This adjustment means that Meta Platforms represents approximately 2.9% of Applied Finance’s portfolio, making it the firm’s fifth largest holding. At the close of the latest quarter, Applied Finance’s holdings in Meta were valued at about $40.4 million.
Other institutional investors have also been active in adjusting their positions in Meta. Vanguard Group Inc. increased its holdings by 0.8% during the second quarter, acquiring an additional 1,532,568 shares. Vanguard now holds 192,591,101 shares, with a total value of approximately $142.15 billion. Similarly, State Street Corp raised its stake by 1.9%, now owning 86,925,674 shares valued at about $64.16 billion. Geode Capital Management LLC, Norges Bank, and Charles Schwab Investment Management Inc. also reported increases in their stakes during the same period.
Current Stock Performance and Financial Overview
As of Thursday, Meta Platforms opened at $643.22. The company maintains a debt-to-equity ratio of 0.27, alongside a current ratio and quick ratio both at 2.60. With a market capitalization of $1.63 trillion, Meta’s price-to-earnings (P/E) ratio stands at 27.37. The company’s stock has experienced a one-year high of $796.25 and a low of $479.80.
Meta’s latest earnings report, released on January 28, 2024, showed earnings per share (EPS) of $8.88, surpassing the expected $8.16 by $0.72. The firm reported revenue of $59.89 billion, exceeding projections of $58.33 billion. Meta’s net margin was 30.08% with a return on equity of 38.61%. Revenue for the quarter represented a robust 23.8% increase compared to the same period last year.
The company also announced a quarterly dividend of $0.525, payable on March 26, 2024, to investors of record on March 16, 2024. This dividend translates to an annual yield of approximately 0.3%. Currently, Meta’s dividend payout ratio stands at 8.94%.
Analyst Ratings and Market Sentiment
Recent ratings from analysts have varied. Wall Street Zen downgraded Meta from a “buy” rating to a “hold” as of November 1, 2023. In contrast, Canaccord Genuity Group raised its target price from $900.00 to $930.00 and maintained a “buy” rating. Other analysts, including Jefferies Financial Group, have set targets ranging from $718.00 to $1,000.00, with many maintaining a “buy” stance. Overall, the consensus rating for Meta Platforms remains a “Moderate Buy” with an average price target of $844.29.
Positive sentiment surrounding Meta has been bolstered by a significant multiyear agreement with NVIDIA, aimed at enhancing the company’s capabilities in artificial intelligence. This partnership includes acquiring millions of NVIDIA GPUs and adopting their CPUs, which is expected to improve chip supply and reduce costs.
Despite these positive developments, there are concerns regarding insider selling, with senior executives including COO Javier Olivan and CFO Susan Li recently disposing of substantial shares. Legal challenges also loom, as CEO Mark Zuckerberg faces scrutiny in a high-profile youth addiction trial.
As institutional investors hold 79.91% of the company’s stock, Meta Platforms continues to navigate a complex landscape characterized by both growth potential and challenges.
