Meta Platforms shares (NASDAQ:) rose as high as 17% Thursday morning in premarket trades, after the social media company announced Q1 results.

Meta reported a Q1 EBITDA per share (EPS) of $2.72. That’s higher than consensus estimates (2.56), according to Refinitiv. Revenue was $27.91B, below estimates of $28.2B.

Just above 1.95 Billion Daily Active Users (DAUs), the company recorded 1.96 Billion in this period. In Q1, the company reported 2.94 billion Monthly Active Users (MAUs), which was below analysts’ consensus estimate of 2.97 billion.

FB’s average revenue per user (ARPU), was $9.54 while analysts expected $9.50. This report is coming after Meta’s disappointing quarter-end 2021 results, which saw the stock drop 26%. It was its worst day in history.

Facebook’s parent company, Facebook Inc., expects to generate revenue of between $28 billion-$30 billion in Q2. This falls short of the analyst consensus estimate of $30.6 trillion. Forecasts account for continuation of trends since Q1, including a timid growth in revenue.

Facebook’s app lineup including Instagram and WhatsApp accounted for 97.5% of revenue in Q1, while the remaining portion came from the metaverse-focused Reality Labs business. Family of apps saw net income decline of 13%, to $11.48 billion. Reality Labs experienced a $2.96 billion drop in revenue in quarter 1, compared with a $1.83 million loss last year.

Facebook also decreased its outlook on total expenses for 2009 to $87 billion-$92 billion. This is a decrease from its $90 billion forecast to $95 billion.

“We think while these times are challenging, over the long run, we do have a very strong competitive advantage when you look across the opportunities advertisers have to advertise both offline and online,” COO Sheryl Sandberg said.

Raymond James analyst Aaron Kessler lowered the price target to $290.00 per share from the prior $340.00 after both Q1 and Q2 came in “better than feared.”

“We maintain our Outperform rating given: 1) we continue to expect solid long-term ad growth of 10% plus; 2) expect continued monetization of newer platforms and formats (e.g. Reels); and 3) we believe valuation is attractive at ~12x our 2022E Core EPS (ex Reality Labs) vs. mid-teens LT EPS growth,” Kessler said in a client note.

Goldman Sachs analyst Eric Sheridan also lowered the price target to $300.00 per share from $355.00 and sees “a favorable risk/reward skew to the shares from current levels.”

“Similar to the parallel of Summer FY2018 (the last large scaled product transition) that we referenced in our review note last quarter, we see Meta on a path to rebuilding investor confidence in the medium/long-term narratives and see the potential for revenue re-acceleration in 2H’22 (as comps ease) as a possible path forward to better stock performance. We take a more conservative approach across our five year forecast period to Meta’s revenue growth and margin cadence to reset for a more conservative assumption around the time for product transition,” Sheridan wrote in a note.

Mizuho analyst James Lee also reiterated a Buy rating as he sees an “attractive entry point” in FB stock. He said that sentiment is at bottom.

By Senad Karaahmetovic