Facebook, now known as Meta Platforms (NASDAQ: META), released fourth-quarter earnings and full-year 2022 results earlier this month. The stock is currently trading at its highest level in the last six months, albeit still at relatively low implied valuation multiples. This comes after a notably tough year for Facebook, as its stock fell 64% last year due to heightened competition from TikTok and a slump in the digital ad market.
So, what changed? The two main changes for this significant increase are cost cuts and the announcement of a $40 billion increase in their share repurchase authorization. While Meta previously taught us about long-term planning and plant/harvest decisions, Facebook’s belt-tightening and share repurchase plan bring up another few lessons on forecasting and share repurchasing, which we revisit in this blog.