Meta Platforms (META) AI Stock Analysis

• Market Cap: $1.89T
• Dividend Yield: 0.28%
• Average Volume (3M): 12.01M
• Price to Earnings (P/E): 27.2
• Beta (1Y): 1.26
• Revenue Growth: 19.38%
• EPS Growth: 40.62%
• Country: US
• Employees: 76,834
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 1.05
• Shares Outstanding: 2,168,962,400
• 10 Day Avg. Volume: 9,586,237
• 30 Day Avg. Volume: 12,010,423
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 10.62
• Enterprise Value/Gross Profit: 12.96
• Enterprise Value/Ebitda: 19.44
• 1Y Price Target: $876.17
• Price Target Upside: 16.60% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 45

• Rating: 82 Outperform
• Price Target: $849.00 ▲(12.98% Upside)

Meta Platforms scores highly due to its robust financial performance and strong earnings call results, driven by AI advancements and user engagement growth. However, technical indicators suggest caution, and valuation metrics indicate moderate attractiveness. Regulatory challenges and high expenses are potential risks.

Positive Factors

Revenue Growth

Strong revenue growth indicates Meta's effective market strategies and expanding user base, supporting long-term financial health and investment in new technologies.

AI Advancements

AI-driven engagement growth enhances user experience and ad effectiveness, strengthening Meta's competitive position in digital advertising.

Strong Cash Position

A robust cash position provides Meta with the flexibility to invest in growth opportunities and weather economic uncertainties, ensuring long-term stability.

Negative Factors

Regulatory Challenges

Regulatory challenges in the EU could limit Meta's ad revenue growth and increase compliance costs, impacting profitability and strategic flexibility.

High Capital Expenditure

Substantial capital expenditures may pressure free cash flow and profitability, potentially affecting Meta's ability to invest in other strategic initiatives.

Reality Labs Operating Loss

Continued losses in Reality Labs highlight challenges in monetizing VR/AR investments, which could strain resources and delay returns from the Metaverse strategy.

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 generates the majority of its revenue through advertising. The company offers targeted advertising solutions to businesses, leveraging its extensive user data to enable advertisers to reach specific demographics with precision. Key revenue streams include ad placements across its social media platforms, where businesses pay for impressions and clicks. In addition to advertising, Meta is exploring monetization strategies for its virtual reality products and is developing subscription services, though these currently represent a smaller portion of overall revenue. The company also engages in strategic partnerships with various companies to enhance its advertising capabilities and broaden its market reach.

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	178.80B	164.50B	134.90B	116.61B	117.93B	85.97B
Gross Profit	146.53B	134.34B	108.94B	91.36B	95.28B	69.27B
EBITDA	97.72B	86.88B	59.05B	37.69B	55.27B	39.53B
Net Income	71.51B	62.36B	39.10B	23.20B	39.37B	29.15B
Balance Sheet
Total Assets	294.74B	276.05B	229.62B	185.73B	165.99B	159.32B
Cash, Cash Equivalents and Short-Term Investments	47.07B	77.81B	65.40B	40.74B	48.00B	61.95B
Total Debt	49.56B	49.06B	37.23B	26.59B	13.87B	10.65B
Total Liabilities	99.67B	93.42B	76.45B	60.01B	41.11B	31.03B
Stockholders Equity	195.07B	182.64B	153.17B	125.71B	124.88B	128.29B
Cash Flow
Free Cash Flow	50.14B	54.07B	43.85B	19.04B	39.12B	23.63B
Operating Cash Flow	102.30B	91.33B	71.11B	50.48B	57.68B	38.75B
Investing Cash Flow	-76.09B	-47.15B	-24.50B	-28.97B	-7.57B	-30.06B
Financing Cash Flow	-45.31B	-40.78B	-19.50B	-22.14B	-50.73B	-10.29B

Meta Platforms Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 751.44
• 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 751.44 is above the 20-day moving average (MA) of 725.95, above the 50-day MA of 741.82, and above the 200-day MA of 677.26, indicating a bullish trend. The MACD of 1.87 indicates Negative momentum. The RSI at 59.14 is Neutral, neither overbought nor oversold. The STOCH value of 87.87 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
META	―	$1.89T	27.21	40.65%	0.28%	19.38%	40.62%
GOOGL	―	$3.32T	28.49	34.83%	0.31%	13.19%	34.51%
ADBE	―	$141.43B	21.05	52.87%	―	10.69%	35.19%
AAPL	―	$4.00T	40.89	149.81%	0.38%	5.97%	0.15%
AMZN	―	$2.46T	35.15	24.77%	―	10.87%	56.13%
ORCL	―	$800.59B	65.01	71.15%	0.69%	9.67%	11.23%
Sector *	―	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

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.