Meta Platforms (META) AI Stock Analysis

• Market Cap: $1.79T
• Dividend Yield: 0.29%
• Average Volume (3M): 11.91M
• Price to Earnings (P/E): 27.2
• Beta (1Y): 1.31
• Revenue Growth: 19.37%
• EPS Growth: 47.56%
• Country: US
• Employees: 76,834
• Sector: Communication Services
• Sector Strength: 87
• Industry: Internet Content & Information
• EPS (TTM): 6.43
• Shares Outstanding: 2,171,148,200
• 10 Day Avg. Volume: 11,714,975
• 30 Day Avg. Volume: 11,909,490
• PEG Ratio: 3.68
• Price to Book (P/B): 9.32
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.79
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 2.71
• Enterprise Value/Gross Profit: 12.47
• Enterprise Value/Ebitda: 5.25
• 1Y Price Target: $714.26
• Price Target Upside: 0.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 46

• Rating: 82 Outperform
• Price Target: $798.00 ▲(12.60%Upside)

Meta Platforms achieves a strong stock score, driven primarily by its robust financial performance and positive earnings call outcomes. While technical indicators suggest positive momentum, overbought signals warrant caution. Valuation metrics indicate a potential overvaluation, and regulatory risks add uncertainty. However, strategic investments in AI and user engagement underpin long-term growth potential.

Positive Factors

AI and Technology Innovation

Meta's investment in Artificial Intelligence and Machine Learning enhances monetization through advanced algorithms.

Revenue Growth

WhatsApp’s monetization initiative is expected to generate a $10 billion advertising run-rate by FY28, which could lift consensus estimates for Meta by approximately 4% on revenue and 5% on operating income.

WhatsApp Monetization

The introduction of ads on WhatsApp targets approximately 1.5 billion daily users, potentially creating a significant new revenue stream.

Negative Factors

Earnings Growth

Meta's earnings growth rate is expected to be below the peer average, impacting its valuation.

Global Monetization

The majority of WhatsApp users are outside the US, where ad monetization is typically lower, and most time is spent within calling and messaging.

Macroeconomic Challenges

The advertising environment faces near-term challenges due to macroeconomic factors.

Meta Platforms Business Overview & Revenue Model

Company Description

Meta Platforms, Inc., formerly known as Facebook, Inc., is a leading American technology conglomerate that operates primarily in the digital and social media sectors. The company is renowned for its suite of products and services, including Facebook, Instagram, WhatsApp, and Messenger. Meta is also heavily invested in developing virtual and augmented reality technologies, notably through its Oculus brand, as part of its broader vision to build the 'metaverse'—a collective virtual shared space.

How the Company Makes Money

Meta Platforms makes money primarily through advertising revenue, which accounts for the majority of its income. The company offers targeted advertising solutions across its platforms, leveraging user data to help advertisers reach specific audiences with high precision. Besides advertising, Meta also generates revenue from its virtual reality hardware and software offerings, particularly through Oculus. Furthermore, the company earns from other business services, such as its Marketplace and payment transaction fees, albeit to a lesser extent. Strategic partnerships, such as those with advertisers and content creators, significantly enhance its revenue-generating capabilities.

Meta Platforms Financial Statement Overview

Summary

Meta Platforms displays strong financial performance with robust profitability across its income statement, balance sheet, and cash flow. The company benefits from high margins, solid revenue growth, and efficient cash generation, though minor fluctuations in free cash flow growth and rising debt levels require monitoring. The overall financial health supports strategic growth objectives.

Income Statement

Meta Platforms shows a strong income statement with impressive gross and net profit margins, reflecting efficient cost management. The TTM gross profit margin is approximately 81.7%, and the net profit margin is 39.1%. Revenue growth is robust, with a 5.8% increase from 2024 to the TTM period, indicating a healthy upward trajectory. EBIT and EBITDA margins also remain strong at 42.9% and 47.9%, respectively, underscoring operational efficiency. Overall, the income statement reflects a well-managed and profitable company.

Balance Sheet

Meta Platforms maintains a solid balance sheet with a debt-to-equity ratio of 0.27, indicating manageable leverage. The equity ratio stands at 66.0%, showcasing a strong financial position with substantial equity backing. Return on equity (ROE) is high at 36.0%, demonstrating effective use of shareholders' equity to generate profits. However, the slight increase in total debt warrants monitoring. The balance sheet reflects financial stability and prudent management of resources.

Cash Flow

The cash flow statement is strong, with a significant free cash flow of $52.3 billion in the TTM period. The free cash flow to net income ratio is 0.79, indicating efficient conversion of income into cash. Operating cash flow to net income ratio is 1.44, highlighting robust cash generation capabilities. Free cash flow growth of -3.3% from 2024 to the TTM period suggests minor fluctuations, but overall cash flow remains strong and supports operational and strategic initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	170.36B	164.50B	134.90B	116.61B	117.93B	85.97B
Gross Profit	139.26B	134.34B	108.94B	91.36B	95.28B	69.27B
EBITDA	91.37B	86.88B	59.05B	42.24B	54.72B	39.53B
Net Income	66.64B	62.36B	39.10B	23.20B	39.37B	29.15B
Balance Sheet
Total Assets	280.21B	276.05B	229.62B	185.73B	165.99B	159.32B
Cash, Cash Equivalents and Short-Term Investments	70.23B	77.81B	65.40B	40.74B	48.00B	61.95B
Total Debt	49.52B	49.06B	37.23B	26.59B	13.87B	10.65B
Total Liabilities	95.18B	93.42B	76.45B	60.01B	41.11B	31.03B
Stockholders Equity	185.03B	182.64B	153.17B	125.71B	124.88B	128.29B
Cash Flow
Free Cash Flow	52.31B	54.07B	43.85B	19.04B	39.12B	23.63B
Operating Cash Flow	96.11B	91.33B	71.11B	50.48B	57.68B	38.75B
Investing Cash Flow	-58.43B	-47.15B	-24.50B	-28.97B	-7.57B	-30.06B
Financing Cash Flow	-40.51B	-40.78B	-19.50B	-22.14B	-50.73B	-10.29B

Meta Platforms Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 708.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For META, the sentiment is Positive. The current price of 708.68 is above the 20-day moving average (MA) of 685.05, above the 50-day MA of 623.69, and above the 200-day MA of 606.99, indicating a bullish trend. The MACD of 20.49 indicates Positive momentum. The RSI at 64.77 is Neutral, neither overbought nor oversold. The STOCH value of 80.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for META.

Meta Platforms Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GOOGL	83 Outperform	$2.01T	18.42	34.79%	0.50%	13.02%	37.73%
META	82 Outperform	$1.79T	27.25	39.83%	0.29%	19.37%	47.56%
GOOG	81 Outperform	$2.01T	18.51	34.79%	0.50%	13.02%	37.73%
PINS	80 Outperform	$23.91B	12.83	48.41%	―	17.81%	1175.52%
SPOT	76 Outperform	$147.84B	118.97	24.28%	―	16.07%	―
Sector *	67 Neutral	£1.88B	9.94	-3.58%	3.34%	3.50%	-50.58%
SNAP	61 Neutral	$13.90B	―	-23.97%	―	14.91%	59.90%

Meta Platforms Corporate Events

Meta Platforms Concludes Annual Shareholder Meeting Decisions

On May 28, 2025, Meta Platforms held its annual shareholder meeting where shareholders voted on fourteen proposals. Key decisions included the election of fifteen directors, the ratification of Ernst & Young LLP as the independent auditor for 2025, and the approval of the 2025 Equity Incentive Plan. Shareholders also approved a non-binding advisory vote on executive compensation to be held every three years. However, several shareholder proposals, including those on dual-class capital structure, AI data usage oversight, and GHG emissions reduction, were not approved. These decisions reflect Meta’s strategic focus and governance priorities, impacting its operational and industry positioning.

The most recent analyst rating on (META) stock is a Buy with a $710.00 price target. To see the full list of analyst forecasts on Meta Platforms stock, see the META Stock Forecast page.

Meta Expands Board with New Independent Directors

On April 11, 2025, Meta Platforms announced the expansion of its Board of Directors to fifteen members, with the election of Dina Powell McCormick and Patrick Collison as independent directors, effective April 15, 2025. This strategic move is expected to enhance Meta’s board with their extensive experience in economic development and financial services, potentially strengthening the company’s position in supporting businesses and entrepreneurs who rely on Meta’s platforms.