TMTB: META thoughts post call

META stock reversed from up 5% to down 3%. Bottom line: #s and commentary around opex/capex were good and #s/commentary around top line were weaker than expected, saying similar things like SNAP did about war impact on ad spend.

$20-21 in EPS next year seems achievable which I think is where buyside will come out at given opex cuts, but now the narrative has switched on the top line debate: before the print, it was up to bears to prove ad environment was going to get worse because of the war – now it’s up to the bulls to prove the ad spend is holding up. Some initial digital agency checks in Oct have already pointed out to slower spend and ratcheted down spend estimates for q4 (see Jefferies last wk) which dovetail with CFO comments.

Top line estimates for 2H next year don’t seem like a layup any longer. The street is modeling a decel (unlike GOOGL’s #s for 2024) but comps get a lot tougher in 2H – will engagement/Ai monetization/C2M be enough for them? How long will war impact ad spend…