Meta Platforms Stock Bounces Back After Earnings

The stock closed at its lowest level since April 2020 yesterday

Deputy Editor
Apr 28, 2022 at 10:46 AM
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Facebook-parent Meta Platforms Inc (NASDAQ:FB) threw its hat into the earnings ring after yesterday's close, reporting better-than-expected first-quarter earnings of $2.72 per share. Daily active users, which declined for the first time ever in the fourth quarter, beat expectations as well, rising to 1.96 billion. On the other hand, the social media mainstay's revenue fell short of Wall Street's forecasts, coming in at $27.91 billion, and the company forecasted lower-than-expected revenue for the second quarter as a result.

Despite the revenue miss, Meta Platforms stock is rallying, last seen up 14.3% at $199.90. Should these gains hold, it would mark FB's biggest single-day percentage gain since January 2016, helping the equity take a huge chunk out of its nearly 50% year-to-date deficit. The shares yesterday pulled back to the $170 level, which was their lowest level of trading since April 2020. Year-over-year, the stock is down 34.8%.

Analysts  have been quick to respond. No less than 17 analysts slashed their price targets, while at least four brokerages raised their price targets. This includes UBS, which lifted its price objective to $310 from $300. Meanwhile, the stock's 12-month consensus price target stands at $307.07 -- a 54% premium to current levels.

Today's options pits show bearish traders targeting FB with fervor. Already, 291,000 calls and 394,000 puts have been exchanged, which is five times the intraday average. The most popular contract is the weekly 4/29 190-strike put, followed by the 200-strike put from the same series, with positions being opened at both. 

This penchant for bearish bets is nothing new, per Meta Platforms stock's 10-day put/call volume ratio of 1.07 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio, which signals puts outpacing calls over the last two weeks, sits in the highest percentile of FB's 12-month range.  

 

 

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