Social media giant Meta Platforms, Wednesday's pick for IBD 50 Growth Stocks To Watch, is in buy range despite a struggling stock market.
In late September, Facebook and Instagram parent Meta Platforms at its Meta Connect conference unveiled its new smart glasses with a built-in artificial intelligence assistant. The company also debuted its Quest 3 virtual-reality headset and an array of generative AI tools designed to give users more reason to spend time on Facebook and Instagram.
On July 26, the Menlo Park, Calif.-based social media company said it earned $2.98 a share on sales of $32 billion in the second quarter. Analysts polled by FactSet had expected Meta earnings of $2.91 a share on sales of $31.08 billion. On a year-over-year basis, Meta earnings increased 21% while sales advanced 11%.
META stock shows an 86 Earnings Per Share Rating, according to IBD Stock Checkup. This rating takes into account earnings growth and profit stability over the past three years. The two most recent quarters are weighted more heavily.
For Meta, those metrics are lackluster. It's three-year EPS growth rate shows a slight decline, while EPS declined 3% year over year in the first quarter.
But META stock still boasts a near-perfect 98 IBD Composite Rating after a tremendous stock price move since November.
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META Stock Hits Buy Point
The company will announce third-quarter results Oct. 25 after the market close. Analysts expect earnings of $3.64 per share, up 122%, according to FactSet.
META stock is in buy range after a strong move past an early entry at 312.87 on Oct. 6. Shares are struggling to decisively move past a cup base's standard buy point at 326.20, per IBD MarketSmith pattern recognition. META stock lost 1.8% Wednesday midday.
Bullishly, the relative strength line hit a new high last week, confirming the strength of the stock's breakout.
Improving fundamentals, along with powerful gains over the last 11 months, also contribute to Meta's high standing and make it worthy of consideration.
Further, with the stock market outlook back in an uptrend under pressure — and a 0%-20% recommended exposure range — investors should be playing defense until the major stock indexes improve.
Best Stocks To Buy And Watch
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Cadence Design Systems | 247.50 | Cup with handle | |
| McKesson | 441.00 | Flat base | |
| Halliburton | 41.08 | Cup with handle |
Source: IBD Data As Of Oct. 18, 2023
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