Meta Platforms (META) AI Stock Analysis

• Market Cap: $1.27T
• Dividend Yield: 0.4%
• Average Volume (3M): 20.52M
• Price to Earnings (P/E): 21.0
• Beta (1Y): 1.28
• Revenue Growth: 21.94%
• EPS Growth: 61.97%
• Country: US
• Employees: 74,067
• Sector: Communication Services
• Sector Strength: 75
• Industry: Internet Content & Information
• EPS (TTM): 23.92
• Shares Outstanding: 2,189,898,200
• 10 Day Avg. Volume: 25,104,922
• 30 Day Avg. Volume: 20,517,168
• PEG Ratio: 0.34
• Price to Book (P/B): N/A
• Price to Sales (P/S): 9.18
• Price to Cash Flow (P/CF): 13.50
• P/FCF Ratio: 13.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $715.29
• Price Target Upside: 42.64% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 46

Meta Platforms receives a strong overall stock score due to its outstanding financial performance, characterized by robust revenue growth, profitability, and cash flow health. Technical analysis presents a neutral to slightly negative outlook but does not significantly impact the overall score. Valuation metrics are favorable, reflecting market optimism. The earnings call underscores strategic growth areas and financial strength, while recent corporate events enhance governance, supporting a positive outlook.

Positive Factors

Advertising Revenue

Rising video engagement and new advertising offerings are expected to support a notable growth in advertising revenue.

Financial Performance

META recorded revenue of USD48.4bn, 2.9% above street expectations.

Product Innovation

Meta is planning to launch a new premium line of smart glasses, codenamed Hypernova, with advanced features like an integrated display, enhanced camera, AI integration, and multiple control mechanisms.

Negative Factors

Antitrust Concerns

The trial for FTC’s antitrust case against Meta is scheduled to start, with key Meta executives, including CEO Mark Zuckerberg, expected to testify.

Macro-economic Challenges

Estimates for the second to fourth quarters of 2025 and longer-term forecasts have been lowered due to weakening consumer sentiment and concerns about tariffs.

Operational Expenses

Substantial investments in data centers and AI infrastructure have increased operational expenses, potentially squeezing margins.

Meta Platforms Business Overview & Revenue Model

Company Description

Meta Platforms, Inc. (formerly Facebook, Inc.) is a leading technology conglomerate headquartered in Menlo Park, California. The company operates in several sectors, including social media, virtual reality, and digital advertising. Meta's core products and services encompass its flagship social networking platform Facebook, Instagram, WhatsApp, Messenger, and its virtual reality hardware and software under the Reality Labs division, including products like Oculus VR headsets. Meta is dedicated to building technology that helps people connect, find communities, and grow businesses.

How the Company Makes Money

Meta Platforms primarily generates revenue through digital advertising across its suite of social media platforms, namely Facebook, Instagram, and Messenger. Advertisers pay to display ads to the vast user base on these platforms, leveraging Meta's sophisticated targeting capabilities driven by user data insights. Another revenue stream comes from its Reality Labs division, which sells virtual reality hardware such as Oculus VR headsets and other related technologies. Additionally, Meta earns from in-app purchases and services offered on its platforms, though this is a smaller portion of its overall revenue. The company's earnings are significantly influenced by its ability to attract and retain users, expand advertising opportunities, and innovate in immersive technologies.

Meta Platforms Financial Statement Overview

Summary

Meta Platforms showcases outstanding financial strength across all financial statements. The company maintains strong revenue growth, profitability, and operational efficiency, supported by a solid balance sheet with low leverage and high equity. Cash flows are robust, demonstrating excellent liquidity and cash generation capabilities. Overall, Meta Platforms is in a strong financial position with a promising growth trajectory.

Income Statement

Meta Platforms demonstrates strong financial performance with impressive growth. Revenue grew significantly over the years, with a notable 21.9% increase from 2023 to 2024. The gross profit margin is solid at 81.7% for 2024, showcasing efficient cost management. The net profit margin improved to 37.9% in 2024, indicating strong profitability. However, EBIT and EBITDA margins, both at 42.2% in 2024, show slight room for operational efficiency improvement.

Balance Sheet

The company's balance sheet is robust with a low debt-to-equity ratio of 0.27, signifying low leverage and a strong equity position. The return on equity is impressive at 34.1% for 2024, reflecting effective equity utilization. The equity ratio is healthy at 66.2%, indicating a strong asset base funded by equity. Overall, the balance sheet reflects financial stability and low risk.

Cash Flow

Meta Platforms exhibits strong cash flow health with significant free cash flow growth of 23.3% from 2023. The operating cash flow to net income ratio is robust at 1.46, indicating effective cash conversion. The free cash flow to net income ratio of 0.87 for 2024 demonstrates solid cash generation relative to earnings. The cash flow statement reflects excellent liquidity and cash management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
164.50B	134.90B	116.61B	117.93B	85.97B
	Gross Profit
134.34B	108.94B	91.36B	95.28B	69.27B
	EBIT
69.38B	46.75B	33.55B	46.75B	32.67B
	EBITDA
86.88B	59.05B	42.24B	54.72B	39.53B
	Net Income Common Stockholders
62.36B	39.10B	23.20B	39.37B	29.15B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
77.81B	65.40B	40.74B	48.00B	61.95B
	Total Assets
276.05B	229.62B	185.73B	165.99B	159.32B
	Total Debt
49.06B	37.23B	26.59B	13.87B	10.65B
	Net Debt
5.17B	-4.63B	11.91B	-2.73B	-6.92B
	Total Liabilities
93.42B	76.45B	60.01B	41.11B	31.03B
	Stockholders Equity
182.64B	153.17B	125.71B	124.88B	128.29B
Cash Flow		Free Cash Flow
54.07B	43.85B	19.04B	39.12B	23.63B
	Operating Cash Flow
91.33B	71.11B	50.48B	57.68B	38.75B
	Investing Cash Flow
-47.15B	-24.50B	-28.97B	-7.57B	-30.06B
	Financing Cash Flow
-40.78B	-19.50B	-22.14B	-50.73B	-10.29B

Meta Platforms Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 501.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• 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 501.48 is below the 20-day moving average (MA) of 558.67, below the 50-day MA of 618.42, and below the 200-day MA of 577.51, indicating a bearish trend. The MACD of -28.28 indicates Positive momentum. The RSI at 35.45 is Neutral, neither overbought nor oversold. The STOCH value of 25.04 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
META	82 Outperform	$1.27T	21.02	37.14%	0.40%	21.94%	61.97%
GOOGL	82 Outperform	$1.85T	18.79	32.91%	0.53%	13.89%	38.99%
GOOG	80 Outperform	$1.93T	19.82	32.91%	0.52%	13.89%	38.99%
PINS	76 Outperform	$17.10B	9.34	47.49%	―	19.35%	―
SPOT	75 Outperform	$115.30B	93.98	28.91%	―	18.36%	―
Sector *	58 Neutral	$13.10B	6.79	-2.53%	3.86%	2.36%	-36.74%
SNAP	58 Neutral	$13.37B	―	-28.69%	―	16.40%	48.48%

Meta Platforms Corporate Events

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.

Spark’s Take on META Stock

According to Spark, TipRanks’ AI Analyst, META is a Outperform.

Meta Platforms’ strong financial performance, coupled with solid earnings and strategic growth areas, supports a high stock score. Financial strength is the most significant driver, with robust revenue and profitability. Valuation is favorable, reflecting market confidence in growth potential. Technical analysis presents a neutral outlook, not significantly impacting the score. Earnings call insights reinforce the growth narrative, despite some operational challenges.

To see Spark’s full report on META stock, click here.

Meta Platforms Increases Executive Bonus Targets for 2025

On February 13, 2025, Meta Platforms’ Compensation, Nominating & Governance Committee approved an increase in the target bonus percentage for its named executive officers, excluding the CEO, under its Bonus Plan. This change, effective for the 2025 performance period, aims to align their compensation with the 50th percentile of the peer group, addressing previous positioning at or below the 15th percentile.