Now Meta, a dividend-paying stock, has reached its highest stock price ever
- Meta reported Q4’23 earnings and the stock exceeded expectations and hit a new all-time high.
- Meta beat both earnings per share and revenue expectations after reporting $40.11 EPS on revenue of $5.33 billion.
- Meta surprised the market with a quarterly dividend announcement – the first was $0.50 per share payable on March 26, 2024.
After such impressive earnings, Mark Zuckerberg has overtaken Bill Gates to become one of the top five richest people in the world. meta platform (Meta).
In our initial earnings preview for Meta, we outlined that the expected stock price movement after the earnings call – based on current implied volatility – was +- $26.66. The stock closed at $394.78 on February 1, and rose to a new all-time high of $485.96 the next day after a stellar earnings call. From the closing price to the peak, it’s a rally of $91.18 – about 3.5 times the upside earnings expectations.
EPS and Revenue Top Expectations
Meta beat both earnings per share (EPS) and revenue expectations after reporting $5.33 EPS on revenue of $40.11 billion.
In Meta’s press release, it surprised the market with its quarterly dividend announcement starting in March:
“Today, Meta’s board of directors declared a cash dividend of $0.50 per share of our outstanding common stock (including both Class A common stock and Class B common stock), payable on March 26, 2024, as of the time of record at closing. Stockholders will be offered the business on February 22, 2024,” Meta announced. “We intend to pay cash dividends on a quarterly basis going forward, subject to market conditions and approval by our board of directors.”
This is big news for the tech-giant, and a sign of maturity for the meta as a whole. Most investors know about Meta, but now that it is a dividend yielding stock, it could bring more dividend investors to the table.
Meta reported another strong quarter for ad demand and revenue growth of 16% year over year (YoY), and this trend could continue in 2024 with big events like the United States elections and the Paris Olympics.
“In the fourth quarter of 2023, ad impressions delivered across our family of apps increased 21% year over year and average cost per ad increased 2% year over year,” Meta reported. “For full year 2023, ad impressions increased 28% year-over-year and average cost per ad decreased 9% year-over-year”.
Looking at the long-term charts of Meta, we can see how sharp this rise has been from the recent low of $88.09 in November 2022.
What’s next for the meta in 2024?
Meta’s recent success brings up some questions – how high can this stock go? If the overall market is weak, can the recent move up this year be wiped out? As options traders, we can look at the scenario of expiration cycles to place certain probabilities around certain numbers for the meta.
When looking at the table of expiration cycles for Meta Stock, we can see that each expiration has an +- expected move of the stock price based on current option prices. To determine what the market expects from the stock price in 2024, we can use the nearest close to the end of the year. In the image above, that is the December 2024 option cycle.
This cycle shows us an expected move in the stock price of +-$111.90 from the current price of $461.92. Using that figure, we have an expected stock price range of $350.02-$573.82 for the rest of the year.
Of course, this figure is just an estimate, but it helps give us context as to what we can expect going forward from the tech giant. We can look at this range at the end of the year to determine whether the current implied volatility covers the actual range, or if the stock price is above the expected range.
Traders and investors who weren’t paying attention to the meta before the recent earnings call certainly are now.
mike butler, Tasty Live Director of Market Intelligence, has been in the market and trading for a decade. He appears options trading concepts liveAired Monday-Friday. @tradermeikeyb
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