The stock of Meta Platforms (META) is down 8% despite the fact that the technology giant reported third-quarter financial results that topped Wall Street forecasts.
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The company led by CEO Mark Zuckerberg reported Q3 earnings per share (EPS) of $7.25, which beat the consensus estimate of $6.69. Revenue of $51.24 billion topped the $49.41 billion that had been expected on Wall Street.
The sharp drop in META stock is due to an income tax charge of $15.93 billion that was disclosed in Meta’s earnings report. The Silicon Valley-based company said that U.S. President Donald Trump’s “One Big Beautiful Bill Act” resulted in the one-time, non-cash income tax hit.
However, Meta stressed that it expects President Trump’s budget bill to result in “a significant reduction” to its U.S. federal tax payments for the rest of 2025 and beyond.
Meta Platforms’ net income. Source: Main Street Data
Forward Guidance
Looking ahead, Meta Platforms said that it expects revenue in the current fourth quarter to be in a range of $56 billon to $59 billion. The midpoint of that range, $57.5 billion, is above what was expected by Wall Street analysts.
Meta also raised the low end of its total expenses for the year by $2 billion, lifting the figure to between $116 billion to $118 billion. That figure was previously $114 billion to $118 billion. The social media company has been spending heavily on artificial intelligence (AI) and some analysts have expressed concerns about its capital expenditures.
However, Meta again raised its 2025 guidance for capital expenditures, saying they will now likely be in a range of $70 billion to $72 billion. It’s previous outlook was for $66 billion to $72 billion of capex.
Is META Stock a Buy?
The stock of Meta Platforms has a consensus Strong Buy rating among 46 Wall Street analysts. That rating is based on 40 Buy and six Hold recommendations issued in the last three months. The average META price target of $878.09 implies 16.95% upside from current levels. These ratings might change after the company’s financial results.
