Meta Platforms (META) AI Stock Analysis

• Market Cap: $1.54T
• Dividend Yield: 0.34%
• Average Volume (3M): 19.79M
• Price to Earnings (P/E): 26.9
• Beta (1Y): 1.27
• Revenue Growth: 21.27%
• EPS Growth: 6.16%
• Country: US
• Employees: 76,834
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 1.05
• Shares Outstanding: 2,177,889,200
• 10 Day Avg. Volume: 23,289,405
• 30 Day Avg. Volume: 19,792,748
• PEG Ratio: 0.38
• Price to Book (P/B): 8.12
• Price to Sales (P/S): 9.02
• P/FCF Ratio: 27.44
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 10.00
• Enterprise Value/Gross Profit: 12.20
• Enterprise Value/Ebitda: 18.53
• 1Y Price Target: $846.48
• Price Target Upside: 40.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 42
• EPS Forecast (FY): 23.18
• Revenue Forecast (FY): $199.39B

• Rating: 71 Outperform
• Price Target: $736.00 ▲(22.26% Upside)

Meta Platforms' overall stock score is driven by strong financial performance and a positive outlook from the latest earnings call, emphasizing AI advancements and revenue growth. However, technical analysis indicates bearish momentum, and the stock's high valuation suggests potential overvaluation. Investors should be cautious of increased expenses and regulatory challenges.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for Meta's services and effective monetization strategies, supporting long-term business expansion.

AI-driven Engagement Growth

Increased user engagement driven by AI advancements enhances Meta's competitive edge and potential for higher ad revenue.

Strong Cash Position

A strong cash position provides Meta with the flexibility to invest in growth opportunities and weather economic uncertainties.

Negative Factors

Increased Expenses

Rising expenses, driven by infrastructure and compensation, could pressure margins and impact profitability if not managed effectively.

Reality Labs Operating Loss

Significant losses in Reality Labs highlight challenges in monetizing VR/AR investments, potentially affecting overall financial performance.

Regulatory Challenges in the EU

Regulatory challenges in the EU could hinder Meta's revenue growth and require strategic adjustments to comply with new regulations.

Meta Platforms Business Overview & Revenue Model

Company Description

Meta Platforms, Inc. is a leading technology company based in Menlo Park, California, primarily known for its social media platforms including Facebook, Instagram, and WhatsApp. Founded by Mark Zuckerberg in 2004, Meta has evolved into a multi-faceted corporation that focuses on building community and bringing people closer together through its suite of products and services. The company is also investing heavily in virtual and augmented reality through its Oculus division, aiming to create immersive social experiences and expand the Metaverse.

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 exhibits strong financial health with robust profitability, efficient operations, and a solid balance sheet. The company continues to grow its revenue and maintain high margins, although recent declines in free cash flow warrant attention. Overall, Meta is well-positioned in the Internet Content & Information industry with a stable financial foundation.

Income Statement

Meta Platforms demonstrates strong profitability with a high gross profit margin of 81.95% and a net profit margin of 39.99% in TTM. The company has shown consistent revenue growth, with a 5.96% increase in the latest period, indicating robust demand for its services. EBIT and EBITDA margins are also impressive at 45.29% and 54.65%, respectively, showcasing operational efficiency.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.25, indicating prudent financial leverage. The return on equity is high at 39.33%, reflecting effective use of shareholders' funds to generate profits. The equity ratio stands at 63.87%, suggesting a strong capital structure with significant equity financing.

Cash Flow

While Meta Platforms maintains a healthy operating cash flow to net income ratio of 2.74, indicating strong cash generation, the free cash flow has declined by 10.56% in the latest period. The free cash flow to net income ratio is 0.49, which is reasonable but shows room for improvement in cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	189.46B	164.50B	134.90B	116.61B	117.93B	85.97B
Gross Profit	155.35B	134.34B	108.94B	91.36B	95.28B	69.27B
EBITDA	102.29B	86.88B	59.05B	37.69B	55.27B	39.53B
Net Income	58.53B	62.36B	39.10B	23.20B	39.37B	29.15B
Balance Sheet
Total Assets	303.84B	276.05B	229.62B	185.73B	165.99B	159.32B
Cash, Cash Equivalents and Short-Term Investments	44.45B	77.81B	65.40B	40.74B	48.00B	61.95B
Total Debt	28.83B	49.77B	37.23B	26.59B	13.87B	10.65B
Total Liabilities	109.78B	93.42B	76.45B	60.01B	41.11B	31.03B
Stockholders Equity	194.07B	182.64B	153.17B	125.71B	124.88B	128.29B
Cash Flow
Free Cash Flow	44.84B	54.07B	43.85B	19.04B	39.12B	23.63B
Operating Cash Flow	107.57B	91.33B	71.11B	50.48B	57.68B	38.75B
Investing Cash Flow	-89.31B	-47.15B	-24.50B	-28.97B	-7.57B	-30.06B
Financing Cash Flow	-50.98B	-40.78B	-19.50B	-22.14B	-50.73B	-10.29B

Meta Platforms Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 602.01
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For META, the sentiment is Negative. The current price of 602.01 is below the 20-day moving average (MA) of 660.15, below the 50-day MA of 707.27, and below the 200-day MA of 675.87, indicating a bearish trend. The MACD of -32.66 indicates Positive momentum. The RSI at 24.70 is Positive, neither overbought nor oversold. The STOCH value of 23.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for META.

Meta Platforms Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AAPL	80 Outperform	$4.03T	36.49	171.42%	0.38%	6.43%	22.85%
GOOGL	80 Outperform	$3.34T	27.27	35.45%	0.29%	13.55%	34.26%
ADBE	78 Outperform	$138.60B	20.25	52.87%	―	10.69%	35.19%
AMZN	76 Outperform	$2.51T	32.90	24.33%	―	11.48%	50.70%
META	71 Outperform	$1.54T	26.93	32.64%	0.34%	21.27%	6.16%
ORCL	64 Neutral	$635.30B	51.59	71.15%	0.86%	9.67%	11.23%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Meta Platforms Corporate Events

Meta’s Earnings Call: AI Drives Strong Growth Amid Challenges

Meta Platforms, Inc. recently held its earnings call, revealing a mixed sentiment among investors and analysts. The company showcased strong revenue and engagement growth, largely driven by advancements in artificial intelligence (AI) and successful product launches, particularly in Reality Labs. However, concerns were raised over increased expenses, a high tax rate, and potential regulatory challenges. Despite these hurdles, Meta’s strategic focus on AI and new product opportunities suggests a positive outlook for the future.

Meta Platforms Reports Strong Q3 2025 Results Amid Tax Impact

Meta Platforms, Inc., a leader in the technology sector, is renowned for its innovative advancements in artificial intelligence and immersive technologies, offering platforms like Facebook, Instagram, and WhatsApp that connect billions globally.

Manning & Napier Advisors LLC Reduces Stake in Meta

TRB Advisors LP Reduces Stake in Meta Platforms

Manitou Investment Boosts Stake in Meta Platforms

Gobi Capital Llc Reduces Stake in Meta Platforms

Cat Rock Capital Reduces Stake in Meta Platforms

Wedgewood Partners Inc Reduces Stake in Meta Platforms

Intermede Investment Partners Ltd Reduces Meta Holdings

Viking Global Reduces Stake in Meta Platforms, Inc.

Maverick Capital Ltd Reduces Stake in Meta Platforms

Lone Pine Capital LLC Reduces Stake in Meta Platforms

Glenview Capital Boosts Stake in Meta Platforms, Inc.

Appaloosa Management LP Reduces Stake in Meta Platforms

ValueAct Holdings LP Reduces Stake in Meta Platforms

Clough Capital Partners Reduces Stake in Meta Platforms

Coatue Management Reduces Stake in Meta Platforms

Chilton Investment Co LLC Reduces Stake in Meta

Ardsley Advisory Partners Increases Stake in Meta Platforms

Altimeter Capital Boosts Stake in Meta Platforms

Owl Creek Asset Management Reduces Stake in Meta Platforms

Driehaus Capital Management Reduces Stake in Meta Platforms

Eminence Capital LLC Boosts Stake in Meta Platforms

Eagle Capital Reduces Stake in Meta Platforms

Night Owl Capital Boosts Stake in Meta Platforms

Graham Capital Reduces Stake in Meta Platforms, Inc.

Blue Grotto Capital Reduces Stake in Meta Platforms

Atreides Management, LP Reduces Stake in Meta Platforms

Woodline Partners LP Boosts Stake in Meta Platforms

Blackstone Inc. Increases Stake in Meta Platforms

XN LP Boosts Stake in Meta Platforms, Inc.

Gilder Gagnon Howe Reduces Stake in Meta Platforms

Theleme Partners Llp Boosts Stake in Meta Platforms

Moore Capital Management Increases Stake in Meta Platforms

Mairs & Power Inc Boosts Stake in Meta Platforms

Tiger Global Boosts Stake in Meta Platforms

Manning & Napier Advisors LLC Reduces Stake in Meta

Causeway Capital Reduces Stake in Meta Platforms

Columbus Hill Capital Boosts Stake in Meta Platforms

Fisher Asset Management Reduces Stake in Meta Platforms

Gladstone Capital Reduces Stake in Meta Platforms

MIG Capital Boosts Stake in Meta Platforms, Inc.

SCS Capital Management Boosts Stake in Meta Platforms

Dodge & Cox Increases Stake in Meta Platforms, Inc.

Sands Capital Management Reduces Stake in Meta Platforms

Bridgewater Associates Boosts Stake in Meta Platforms

Egerton Capital Reduces Stake in Meta Platforms

Weitz Investment Management Reduces Stake in Meta Platforms

Diamond Hill Capital Reduces Stake in Meta Platforms

Bowie Capital Reduces Stake in Meta Platforms, Inc.

PRIMECAP Management Co Boosts Stake in Meta Platforms

Davis Selected Advisers Reduces Stake in Meta Platforms

First Eagle Investment Management LLC Reduces Meta Stake

Cryder Capital Boosts Stake in Meta Platforms

First Pacific Advisors LLC Reduces Stake in META

TRB Advisors LP Boosts Stake in Meta Platforms

ARK Investment Management LLC Reduces Stake in Meta

Meta Platforms, Inc. Earnings Call Highlights AI Growth

Meta Platforms, Inc. recently held its earnings call, showcasing a strong performance driven by advancements in AI technology. The company reported significant growth in revenue and user engagement, attributed to its strategic investments in AI infrastructure and talent. Despite these achievements, Meta faces challenges, particularly with losses in its Reality Labs division and regulatory pressures in the European Union.

Meta Platforms Reports Strong Q2 2025 Results

Meta Platforms, Inc., a leader in social media and technology, is renowned for its suite of applications including Facebook, Instagram, Messenger, and WhatsApp, and is advancing in artificial intelligence and immersive technologies. In its second quarter of 2025, Meta reported a robust financial performance with a 22% increase in revenue to $47.52 billion and a 36% rise in net income to $18.34 billion, reflecting strong operational growth. Key metrics included a 6% increase in daily active users and an 11% rise in ad impressions, alongside a 9% increase in average ad prices, showcasing the company’s effective monetization strategies. The company also reported significant capital expenditures and a continued focus on share repurchases and dividends. Looking ahead, Meta anticipates continued revenue growth in the third quarter of 2025, although at a slower pace in the fourth quarter due to previous strong growth comparisons. The company is also preparing for increased expenses in 2026, driven by infrastructure and employee compensation needs, while navigating regulatory challenges in the EU.