Meta Platforms Inc. (NASDAQ:META), the powerhouse behind the world’s largest social media network, boasts a staggering 4 billion monthly active users across its suite of apps, including Facebook, Instagram, WhatsApp, Threads, and Messenger. Facilitating global connections through messaging, photo and video sharing, video calling, and more, Meta underwent a rebranding in 2021 to reflect its strategic shift towards the metaverse and artificial intelligence (AI) applications.
Despite a robust 37.8% surge in its stock this year, Meta stands out among the elite “Magnificent 7” stocks, second only to Nvidia (NASDAQ:NVDA), which has soared 55%. Unlike NVDA, which has dipped approximately 20% from its year-to-date (YTD) peak, Meta has displayed resilience, experiencing only an 8% pullback from its 2024 zenith thus far.
In its Q4 earnings release on February 1, Meta reported a stellar revenue increase of 24.7% to $40.11 billion, with diluted earnings per share (EPS) skyrocketing from $1.76 to $5.33 year-over-year (YoY). Despite a 21% YoY rise in ad impressions, the average price per ad decreased by 9% YoY.
For Q1 2024, Meta forecasts revenue of $35.75 billion at the midpoint, surpassing Wall Street’s expectations. With analysts eyeing a profit of $4.32 per share – a 63% YoY surge – Meta is poised to unveil its Q1 earnings after market close on Wednesday, April 24, having exceeded bottom-line estimates in each of its last four quarterly reports.
Amid Meta’s stellar performance, analysts remain bullish, with a consensus “Strong Buy” rating from the 45 brokerage firms covering the stock. The mean price target of $520.73 implies an 8.7% upside potential from current levels.
Recently, Citi raised its price target for Meta, emphasizing that the increased advertisement load on its Reels video posts has not deterred engagement – a significant positive for Meta, especially with TikTok potentially facing legislative challenges.
Citi analyst Ronald Josey noted that despite a 90 basis point increase in ad load on Instagram Reels from the previous quarter, users remained undeterred, with average daily active user minutes rising by 4% over the same period. Furthermore, Josey observed that 79% of Gen Z users made purchases after viewing a Reel on the platform.
Bullish on the Reels effect, Josey projects a 14% revenue growth for 2025, coupled with an EPS forecast of $24.23. With a freshly revised price target of $590, Josey anticipates a potential upside of more than 22% for META from current levels.
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Author Stephanie Bédard-Châteauneuf 
