Meta Stock Is ‘Priced for Perfection’ after Post Earnings Rally, Says Needham

Social media giant Meta Platforms (META) recently delivered strong earnings results and upbeat guidance, but some analysts believe the stock may now be priced too optimistically. More specifically, Laura Martin, a five-star analyst at Needham, said that the shares are “priced for perfection,” meaning investors are assuming everything will go right. While she admitted that Meta’s outlook looks impressive on paper, she warned that the company’s heavy spending plans leave very little room for disappointment.

Importantly, Martin pointed out that Meta is forecasting roughly 30% growth on a currency-neutral basis in the first quarter, a sharp acceleration from the prior period. That level of growth would be “fantastic” if achieved, she said, but missing those targets could be costly. According to Martin, the stock could fall 10% to 15% if Meta fails to deliver on its revenue projections, especially since much of the current spending cannot be easily reversed in Fiscal 2026.

She also noted that returns on capital are expected to decline, with margins projected to fall from about 40% in 2025 to the low 30% range in 2026 as capital spending ramps up. For Meta to justify its current valuation, Martin said its large investments in artificial intelligence must clearly translate into higher productivity and faster revenue growth. If those AI efforts pay off, the stock could continue moving higher. If not, she sees meaningful downside risk. As a result, Martin has a Hold rating without a price target.

What Is the Price Target for Meta?

Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 40 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $860.95 per share implies 17% upside potential.

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