Meta stock rises 4% as it beats earnings estimates

Meta (META) reported its third quarter earnings on Wednesday, beating on the top and bottom lines.

The company’s shares rose as much as 4% in after-hours trading, as it continues to rebound from a lackluster 2022.

Meta’s been navigating rough waters, steadying itself as an AI-powered advertising giant and working through its capital-intensive expansion into VR and AR. The Facebook and Instagram parent has been in the process of shoring up two key areas of interest for investors — its AI efforts and its position in the digital advertising market, which has been in a prolonged slump and is just showing signs of a rebound.

Meta’s Q3 advertising revenue came in at $33.64 billion, compared to the expected $32.94 billion. The company beat on ad impressions estimates, clocking an increase of 31% year over year, versus the expected 29.6%.

Meta shares have risen more than 140% year to date, massively outperforming both the S&P 500 and the Nasdaq Internet Index, which are up around 9% and 34% this year, respectively.

“The stock has done well this year,” Neuberger Bergman analyst Daniel Flax told Yahoo Finance Live on Wednesday. “[If they can] drive durable growth and translate that into earnings per share and free cash flow generation, I think the stock can continue to work its way higher.”

Meta’s near future could be mired in legal risks, as the company is staring down federal and state lawsuits from 42 attorneys general, who are alleging that Facebook and Instagram’s features geared toward children are addictive.

“We’re disappointed that instead of working productively with companies across the industry to create clear, age-appropriate standards for the many apps teens use, the attorneys general have chosen this path,” a Meta spokesperson said in a statement.

Currently, Wall Street analysts’ recommendations for Meta break down to 60 Buys, seven Holds, and two Sells.