Meta Platforms (META) stock rose out of the gate Thursday after the parent company of Facebook and Instagram beat top- and bottom-line expectations for its fourth quarter.
In the three months ending December 31, Meta's revenue increased 20.6% year over year to $48.4 billion, boosted by a 5% rise in its family daily active people (DAP) to 3.35 billion. Its earnings per share (EPS) were up 50.5% from the year-ago period to $8.02.
"We continue to make good progress on AI [artificial intelligence], glasses, and the future of social media," said Meta Platforms CEO Mark Zuckerberg in a statement. "I'm excited to see these efforts scale further in 2025."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results beat analysts' expectations. Wall Street was anticipating revenue of $47 billion, earnings of $6.77 per share and daily active people of 3.32 billion, according to CNBC.
For its first quarter, Meta said it expects to achieve revenue between $39.5 billion to $41.8 billion. The midpoint of this range, $40.65 billion, came in below analysts' expectations for revenue of $41.7 billion, but Meta added that its outlook assumes a 3% headwind related to foreign currency translation.
"Meta is suffering from challenging macroeconomic conditions that are negatively impacting its advertising spending," says Brian Mulberry, client portfolio manager at Zacks Investment Management. The company is also facing "unfavorable forex, targeting and measurement headwinds due to Apple's (AAPL) iOS changes, normalization of e-commerce after the pandemic peak and higher inflation," he adds.
Nevertheless, Zuckerberg says that "this is going to be a really big year" for Meta and that "the trajectory for most of our long-term initiatives" will be "a lot clearer by the end of this year."
As for spending levels, which Wall Street is keeping a close eye on, Meta said it expects total expenses in 2025 to be in the range of $114 billion to $119 billion, with infrastructure believed to be the "single largest driver of expense growth."
Meta pays Trump
In separate news, media reports indicate Meta Platforms agreed to pay $25 million to settle a lawsuit brought against the company by President Donald Trump after his accounts were suspended in 2021 following the January 6 attack on the U.S. Capitol.
According to The Wall Street Journal, $22 million will go toward building Trump's presidential library with the remainder used to pay legal fees and plaintiffs.
Is META stock a buy, sell or hold?
Meta Platforms has been a powerhouse on the price charts over the past 12 months, up 69% on a total return basis (price change plus dividends) vs the S&P 500's 24% gain. Unsurprisingly, Wall Street is very bullish on the Magnificent 7 stock.
According to S&P Global Market Intelligence, the average analyst target price for the large-cap stock is $717.79, representing implied upside of more than 6% to its January 29 close. Additionally, the consensus recommendation is Strong Buy.
Financial services firm Wedbush maintained its Outperform rating (equivalent to a Buy) after Wednesday night's earnings release and raised its price target to $770 from $700.
"Meta reported strong fourth-quarter results with revenue roughly 3% ahead of the Street and operating income around 17% above consensus," says Wedbush analyst Scott Devitt. "First-quarter revenue guidance was in line with consensus on an forex-neutral basis, and we expect investors will look past near-term forex headwinds as the company continues to deliver improvements in user engagement and monetization."
Related Content
-
A Lesson From the School of Rock About the MarketsIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I retired at 65 with $7.8 million and feel like I over-saved. My 40-something son is on the same path. Should I tell him to reconsider?We ask financial experts for advice.
-
A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and Around
It's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
-
To Reap the Full Benefits of Tax-Loss Harvesting, Consider This Investment Strategist's StepsTax-loss harvesting can offer more advantages for investors than tax relief. Over the long term, it can potentially help you maintain a robust portfolio and build wealth.
-
Social Security Wisdom From a Financial Adviser Receiving Benefits HimselfYou don't know what you don't know, and with Social Security, that can be a costly problem for retirees — one that can last a lifetime.
-
Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest EggA sizable nest egg is a good start, but your plan should include two to five years of basic expenses in conservative, liquid accounts as a buffer against market volatility, inflation and taxes.
-
Dow Adds 472 Points After September CPI: Stock Market TodayIBM and Advanced Micro Devices created tailwinds for the main indexes after scoring a major quantum-computing win.
-
October Fed Meeting: Live Updates and CommentaryThe October Fed meeting is a key economic event, with Wall Street waiting to see what Fed Chair Powell & Co. will do about interest rates.
-
The Delayed September CPI Report is Out. Here's What it Signals for the Fed.The September CPI report showed that inflation remains tame – and all but confirms another rate cut from the Fed.
