Meta Platforms (META) AI Stock Analysis

• Market Cap: $1.63T
• Dividend Yield: 0.31%
• Average Volume (3M): 14.38M
• Price to Earnings (P/E): 25.3
• Beta (1Y): 1.30
• Revenue Growth: 19.37%
• EPS Growth: 47.56%
• Country: US
• Employees: 76,834
• Sector: Communication Services
• Sector Strength: 90
• Industry: Internet Content & Information
• EPS (TTM): 6.43
• Shares Outstanding: 2,171,148,200
• 10 Day Avg. Volume: 8,815,855
• 30 Day Avg. Volume: 14,383,581
• PEG Ratio: 3.38
• Price to Book (P/B): 8.56
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.14
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 2.49
• Enterprise Value/Gross Profit: 11.47
• Enterprise Value/Ebitda: 4.98
• 1Y Price Target: $696.12
• Price Target Upside: 3.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 45

• Rating: 80 Outperform
• Price Target: ―

Meta Platforms scores highly due to its strong financial performance, highlighted by robust revenue growth and profitability. The earnings call reinforces this strength with solid growth guidance, though operational challenges like increased expenses are noted. Valuation remains favorable, but technical indicators suggest caution due to bearish momentum. Recent corporate events bolster strategic positioning, contributing positively to the score.

Positive Factors

AI Development

Meta outlined five core opportunities with AI, including improved advertising, more engaging experiences, business messaging, Meta AI, and AI devices.

Earnings

Meta reported solid Q1 results, with both revenue and profitability exceeding expectations.

Negative Factors

Operational Expenses

Meta's substantial investments in infrastructure have led to increased operational expenses, which might pressure margins.

Regulatory Challenges

The company does face potential macro and regulatory headwinds, with shares still well off recent highs.

Meta Platforms Business Overview & Revenue Model

Company Description

Meta Platforms, Inc. engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately. The Reality Labs segment provides augmented and virtual reality related products comprising consumer hardware, software, and content that help people feel connected, anytime, and anywhere. The company was formerly known as Facebook, Inc. and changed its name to Meta Platforms, Inc. in October 2021. Meta Platforms, Inc. was incorporated in 2004 and is headquartered in Menlo Park, California.

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 exhibits strong financial performance with impressive income statement metrics, including a 5.8% revenue increase and high profitability margins. The balance sheet is solid with manageable leverage and strong equity position, though a slight increase in debt is noted. The cash flow is robust with substantial cash generation, supporting strategic initiatives despite minor fluctuations in free cash flow growth.

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
	EBIT
73.12B	69.38B	46.75B	33.55B	46.75B	32.67B
	EBITDA
86.47B	86.88B	59.05B	42.24B	54.72B	39.53B
	Net Income Common Stockholders
66.64B	62.36B	39.10B	23.20B	39.37B	29.15B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
65.40B	77.81B	65.40B	40.74B	48.00B	61.95B
	Total Assets
229.62B	276.05B	229.62B	185.73B	165.99B	159.32B
	Total Debt
37.23B	49.06B	37.23B	26.59B	13.87B	10.65B
	Net Debt
-4.63B	5.17B	-4.63B	11.91B	-2.73B	-6.92B
	Total Liabilities
76.45B	93.42B	76.45B	60.01B	41.11B	31.03B
	Stockholders Equity
153.17B	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: 670.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 670.9 is above the 20-day moving average (MA) of 631.95, above the 50-day MA of 584.41, and above the 200-day MA of 593.73, indicating a bullish trend. The MACD of 20.36 indicates Negative momentum. The RSI at 69.78 is Neutral, neither overbought nor oversold. The STOCH value of 83.12 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	85 Outperform	$2.09T	19.15	34.79%	0.47%	13.02%	37.73%
GOOG	84 Outperform	$2.09T	19.28	34.79%	0.46%	13.02%	37.73%
META	80 Outperform	$1.63T	25.26	39.83%	0.31%	19.37%	47.56%
PINS	77 Outperform	$21.59B	11.59	48.41%	―	17.81%	1175.52%
SPOT	77 Outperform	$134.93B	108.59	24.28%	―	16.07%	―
SNAP	66 Neutral	$13.70B	―	-23.97%	―	14.91%	59.90%
Sector *	61 Neutral	$14.28B	5.89	-4.20%	3.70%	2.73%	-35.75%

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.