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Meta Platforms (META), the parent company of Facebook, Instagram, WhatsApp, Oculus and other brands, is scheduled to report first quarter results after market close on Wednesday, April 26 with a conference call scheduled for 5 pm ET.Here's what to watch for: 

EXPECTATIONS: Last quarter, Meta Platforms reported earnings of $1.76 per share, missing consensus at that time of $2.22, on revenue of $32.17B that beat the $31.53B consensus forecast.

The company said at that time that it expected second quarter revenue to be in a range of $26B-$28.5B, bracketing the then-current consensus of $27.14B.

Mark Zuckerberg, Meta founder and CEO, said at the time: "Facebook just reached the milestone of 2 billion daily actives. The progress we're making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the 'Year of Efficiency' and we're focused on becoming a stronger and more nimble organization." The company also cut its FY23 total expenses view to $89B-$95B from $94B-$100B and announced a $40B increase in its share repurchase authorization.

Current consensus EPS and revenue forecasts for Meta's March-end quarter stand at $2.03 and $27.65B, respectively, according to data provided by Refinitiv. That EPS estimate is up from $1.55, where it stood 90 days ago, Refinitiv data shows. Bloomberg's adjusted EPS estimate for Q1 stands at $2.53.

WALL STREET MORE BULLISH: In the day following Meta's last report, the stock was upgraded by no fewer than three research firms.

Rosenblatt upgraded Meta to Buy, stating that when the firm had launched coverage of Meta last April, a combination of high spending, weakening macro and ad clouds kept it on the sidelines. However, the last report showed that "each of these headwinds has pivoted to a tailwind," the analyst told investors.

Meanwhile, BofA also upgraded Meta to Buy following the Q4 results. The company's U.S. advertising revenue accelerated in Q4 and there are drivers that could lead to ongoing multiple expansion for the shares, the analyst told investors. Meta shares are positioned for leverage and earnings upside as the ad environment improves, and its competitive environment is improving with Reels usage growing and TikTok active users decelerating, contended BofA, adding that "getting back to a market multiple" would yield a $220 stock price for Meta.

At the same time, Piper Sandler upgraded Meta to Overweight following the Q4 report. The company's fiscal 2023 spending guidance was lowered meaningfully, yielding a "sharp reset higher" to free cash flow expectations, the analyst told investors. Piper believes the magnitude of change coming out of the quarter warrants a more constructive rating, despite a difficult advertising market and no capitulation on the company's metaverse investment.

COST CUTS: On March 14, Meta Platforms announced additional workforce reductions of about 10,000 people, with CEO Mark Zuckerberg telling employees : "Over the next couple of months, org leaders will announce restructuring plans focused on flattening our orgs, canceling lower priority projects, and reducing our hiring rates."

Zuckerberg added: "Overall, we expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven't yet hired. After restructuring, we plan to lift hiring and transfer freezes in each group... A leaner org will execute its highest priorities faster. People will be more productive, and their work will be more fun and fulfilling. We will become an even greater magnet for the most talented people. That's why in our Year of Efficiency, we are focused on canceling projects that are duplicative or lower priority and making every organization as lean as possible."

About a week later, Meta received a trio of upgrades in as many days, from analysts at Edward Jones, Morgan Stanley and KeyBanc.

Edward Jones upgraded Meta to Buy from Hold, stating that the company reducing expense expectations addresses concerns about heavy spending on its metaverse initiative. The firm also thinks Meta's advertising revenue could stabilize and return to modest growth by the end of 2023 as the online ad market starts to recover.

Morgan Stanley upgraded Meta to Overweight, with the analyst there citing Meta's "structural pivot" to focusing on efficiency and return on invested capital. The firm also pointed to improving revenue and engagements trends, "surging" Reels monetization and "further revenue call options" in artificial intelligence, subscriptions, and click-to-message for the upgrade.

KeyBanc upgraded Meta Platforms to Overweight on the analyst's belief that the advertising market was settling "on more stable footing," which shifts the firm's preference back towards Meta. With its latest reductions, Meta's 2023 operating expense guidance has been reduced by 10%, the analyst told investors. When coupled with CPMs showing signs of improvement, KeyBanc believes the company's operating margins should get to at least 31% by 2024.

More recently, Argus upgraded Meta to Buy on April 5, arguing that the company's deep cost cuts should boost its profitability even in an uncertain macro uncertainty. The firm added that two of Meta's competitors are currently experiencing problems that could slow their growth - TikTok faces a potential ban in the U.S., or at least the sustained hostility of the U.S. government, and Twitter, which it said "may not have been a major threat" to Meta.

Meta's Zuckerberg told staff that he isn't ruling out future layoffs and added that he doesn't anticipate the company to hire as quickly as it did before job cuts that began in late 2022, The Wall Street Journal's Salvador Rodriguez, Jeff Horwitz, and Sam Schechner reported on April 20. Zuckerberg addressed workers in a virtual Q&A session just one day after the social media giant completed its latest round of workforce reductions, the authors said. The CEO said that roughly 4,000 employees were affected by the latest cuts, the authors noted.

TAKING THE OTHER SIDE: On April 17, New Street downgraded Meta Platforms to Neutral from Buy with an unchanged price target of $220. The analyst sees better opportunities for upside elsewhere in the firm's coverage after Meta's outperformance relative to the group. The company's "Year of Efficiency" re-rating is likely complete and while incremental cost cuts could help boost estimates, they are unlikely to impact the multiple materially, the analyst told investors. Despite Meta's incremental focus on costs, the firm thinks the company's mid-to-long term margin outlook "lacks visibility."

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