Should Investors Consider Meta (META) or Snap's (SNAP) Stock After Q3 Earnings?

Reporting third-quarter results on Wednesday, Meta Platforms META and Snap SNAP were able to exceed top and bottom line expectations but saw their stocks dip more than -3% in today’s trading session.Snap shares initially rallied after its Q3 report with Meta continuing a post-earnings selloff on Thursday. Optimism for Snap came as its Snapchat application doubled the number of active users and advertisers from a year ago while Meta fell on concerns of increased spending. Meta’s Q3 ResultsAs the leader in the realm of social media outlets, Meta’s daily active users (DAUs) were up to 3.32 billion during Q3 compared to 3.19 billion in the comparative period. Meta posted Q3 sales of $40.58 billion which topped estimates of $40.2 billion and rose 19% from $34.14 billion in the prior-year quarter. More impressive, Q3 EPS of $6.03 beat expectations of $5.19 a share by 16% and spiked 37% from $4.39 per share a year ago.Meta has surpassed earnings expectations for eight straight quarters posting an average EPS surprise of 11.34% in its last four quarterly reports.Image Source: Zacks Investment ResearchCEO Mark Zuckerberg stated Meta is committed to increasing its spending on AI and the metaverse which weighed on investor sentiment and appears to have led to some profit-taking after earnings. To that point, META is still sitting on nearly +60% gains in 2024.It’s also noteworthy that Meta has $43.85 billion in cash & equivalents which increased from $41.86 billion at the end of Q3 2024 although this is down from $65.4 billion  coming into the year.That said, earnings estimate revisions have continued to trend higher for both fiscal 2024 and FY25. Considering such, Meta's stock sports a Zack Rank #2 (Buy) with its robust bottom line now projected to expand 44% in FY24 and forecasted to increase another 13% in FY25 to $24.37 per share.Image Source: Zacks Investment Research Snap’s Q3 ResultsSnapchat’s DAUs more than doubled year over year to 443 million with Snap bringing in $1.37 billion in sales. This topped sales estimates of $1.35 billion and spiked 16% from $1.18 billion in Q3 2023.Q3 EPS of $0.08 beat the Zacks Consensus of $0.05 and increased from $0.02 a share in the comparative quarter. Snap has reached or exceeded the Zacks EPS Consensus for nine consecutive quarters and has posted an impressive average earnings surprise of 58.57% in its last four quarterly reports.Image Source: Zacks Investment ResearchHowever, earnings estimate revisions for FY24 and FY25 are lower over the last 90 days landing Snap’s stock a Zacks Rank #4 (Sell) at the moment. Snap shares are down -27% year to date with the company striving to stay above the profitability line after going public in 2017.Image Source: Zacks Investment Research Takeaway The post-earnings dip in Meta’s stock could certainly lead to an opportunity for longer-term investors. Meanwhile, caution may be advised when investing in Snap shares until there is hopefully a more favorable trend of earnings estimate revisions.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Snap Inc. (SNAP): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks