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On Thursday, Oppenheimer raised the price target for Meta Platforms Inc. (NASDAQ: NASDAQ:META) to $665 from the previous $650, while maintaining an Outperform rating on the social media giant’s shares. With a market capitalization of $1.39 trillion and an impressive "GREAT" financial health score according to InvestingPro, Meta continues to demonstrate strong market leadership. The adjustment follows Meta’s recent guidance for the second quarter, which anticipates a revenue increase of 9% to 16%, a figure that surpassed analyst expectations. This guidance builds on Meta’s strong performance, with revenue growing 21.94% over the last twelve months and maintaining an impressive gross profit margin of 81.68%. The company also announced a reduction in forecasted expenses for fiscal year 2025 by $1 billion, alongside a significant $5.5 billion increase in capital expenditures, reflecting a strong focus on the development of artificial intelligence (AI) technologies. Want deeper insights? InvestingPro offers 12 additional exclusive tips about Meta’s financial strength and market position.
Meta’s performance in April showed stable trends, with the company not experiencing any significant advertiser pullback. However, there was a noted softness among China-based advertisers and a shift in ad spending from some sellers located in China to markets outside the United States. The implementation of AI-driven recommendations has led to an increase in user engagement, with time spent on Facebook and Instagram rising by 7% and 6% respectively over the past six months. This growth is slightly lower than the 8% and 6% increases observed in the prior nine months.
The first quarter of 2025 saw a 5% year-over-year growth in advertising impressions, a slight decrease from the 6% growth rate in the previous quarter. Meta’s first-quarter Generally Accepted Accounting Principles (GAAP) expenses were also reported to be 10% and 7% below Oppenheimer and Street estimates, respectively. Looking ahead, the company is guiding for a 21% year-over-year increase in GAAP expenses for fiscal year 2025, despite realizing a $3 billion benefit from extending the useful life of its servers. For fiscal year 2026, GAAP expenses are expected to grow by 20%.
Potential regulatory changes in Europe, particularly the Digital Markets Act (DMA), could pose a significant challenge for Meta, but this remains an uncertain factor. Oppenheimer’s new price target of $665 implies a 21 times multiple on Meta’s projected earnings per share for 2027, which aligns with the valuation multiples of the company’s industry peers. The company’s current P/E ratio stands at 21.99x, while delivering an impressive 37% return on equity. According to InvestingPro’s Fair Value analysis, Meta currently appears fairly valued. For comprehensive analysis including detailed financial metrics and future growth projections, investors can access Meta’s complete Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks.
In other recent news, Meta Platforms Inc. has seen a series of analyst adjustments following its impressive first-quarter earnings report. Meta’s revenue and EBITDA exceeded analyst forecasts by 2% and 14%, respectively, prompting Piper Sandler to raise the company’s price target to $650 while maintaining an Overweight rating. Stifel analysts also increased their price target to $655, citing Meta’s better-than-expected revenue and operating margins. Meanwhile, BofA Securities lifted Meta’s price target to $690, highlighting the company’s AI-driven platform and its potential to optimize earnings per share.
Truist Securities raised Meta’s price target to $720, maintaining a Buy rating, noting the company’s strong ad performance and investments in artificial intelligence. Despite a price target reduction to $750 from $800, Raymond (NSE:RYMD) James continues to support a Strong Buy rating, appreciating Meta’s growth prospects and advancements in advertising models. The analysts from these firms uniformly acknowledged Meta’s strategic focus on AI and its impact on future earnings.
Meta’s increased capital expenditures, intended to support AI initiatives, have been a common theme across these analyses. The company’s broader revenue outlook and healthy trends in April suggest resilience amidst economic uncertainties. Analysts remain constructive on Meta’s prospects, supported by its robust user engagement and potential for monetization through AI advancements.
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