Meta Platforms (META) stock is trading in negative territory Thursday after the parent company of Facebook and Instagram beat top- and bottom-line expectations for its third quarter, but came up short on user growth. A big boost in the company's spending outlook is also causing concern for investors.
In the three months ended September 30, Meta's revenue increased 18.9% year over year to $40.6 billion, due in part to a 5% rise in its family daily active people (DAP) to 3.29 billion. Meta also said its earnings per share (EPS) rose 37.4% from the year-ago period to $6.03.
"We had a good quarter driven by artificial intelligence (AI) progress across our apps and business," said Meta CEO Mark Zuckerberg in a statement. "We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses."
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 headline results beat analysts' expectations. Wall Street was anticipating revenue of $40.3 billion and earnings of $5.25 per share, according to CNBC. However, its DAP came up short of expectations of 3.31 billion.
For the fourth quarter, Meta said it anticipates revenue in the range of $45 billion to $48 billion. The midpoint of this range, $46.5 billion, came in just ahead of analysts' expectations of $46.3 billion.
Meta also raised the low end of its full-year capital expenditures outlook, now anticipating a range of $38 billion to $40 billion from the previous guidance of $37 billion to $40 billion.
In Meta's prepared remarks, Chief Financial Officer Susan Li added that the company continues to expect "significant capital expenditures growth in 2025" as it continues to invest in its AI infrastructure.
Is META stock a buy, sell or hold?
Meta Platforms has been one of the best-performing Magnificent 7 stocks in 2024, up more than 67% for the year to date on a total return basis (price change plus dividends). Unsurprisingly, Wall Street is upbeat toward the communication services stock.
According to S&P Global Market Intelligence, the average analyst target price for META stock is $629.77, representing implied upside of roughly 9% to current levels. Additionally, the consensus recommendation is Strong Buy.
Financial services firm Oppenheimer has an Outperform rating (equivalent to a Buy) and $650 price target on the large-cap stock.
"Meta Platforms Inc. is the world's largest social networking company, with 3.7 billion monthly users across all its properties," says Oppenheimer analyst Jason Helfstein. "While META's historical advantage has been the social graph and the ability to share and follow pictures and videos uploaded by users, the company now believes it must evolve to use advanced algorithms to deliver content to users and leverage its social graph in the Metaverse."
The analyst adds that AI will help drive revenue upside through increasing engagement for users and better conversion for advertisers.
Related Content
- Earnings Calendar and Analysis for This Week
- Analysts' Top S&P 500 Stocks to Buy Now
- If You'd Put $1,000 Into Google Stock 20 Years Ago, Here's What You'd Have Today
-
4 Career Moves to Make Now if You're Worried About a RecessionWorried about a recession? These steps to protect your job prospects will help you professionally whether a downturn develops or not.
-
How StoryCorps Works and How You Can Tell Your StoryStoryCorps has recorded conversations between thousands of people, and anyone can participate. National facilitator Alan Jinich explains how to share your story.
-
I'm a Retirement Psychologist: Here's Why Doing What You 'Ought' in Retirement Beats Doing Whatever You WantTrue retirement freedom isn't about simply doing whatever you want, but about finding purpose and direction through commitments that align with your deepest values and allow you to contribute meaningfully.
-
Tactical Roth Conversions: Why 2025-2028 Is a Critical Window for RetireesThe One Big Beautiful Bill (OBBB) extended today's low tax brackets, but they may not last. Here's how smart planning now can prevent costly tax surprises later.
-
Ready to Retire? It's Not Too Late to Convert to a Roth IRAMillions of Americans are turning 65 this year. If you're retiring soon, don't dismiss the idea of a Roth conversion — it could still be a smart move even now.
-
What is AI Worth to the Economy?The Letter Spending on AI is already boosting GDP, but will the massive outlays being poured into the technology deliver faster economic growth in the long run?
-
9 Warren Buffett Quotes for Investors to Live ByWarren Buffett transformed Berkshire Hathaway from a struggling textile firm to a sprawling conglomerate and investment vehicle. Here's how he did it.
-
I'm a Financial Adviser: Three Things You Will Wish You Did Before the Fed Cuts Interest RatesWith potential interest rate cuts on the horizon, you might want to lock in today's higher yields and consider adjusting your asset allocation.
-
Simple Ways to Save on Back-to-School Shopping This YearSet a budget and stick to it, scour the house for what you already have, decorate backpacks and lunch boxes with your kids and consider buying some items during holiday sales.
-
Stocks End Strong Month on a Down Note: Stock Market TodayThere was likely a bit of profit-taking ahead of a historically weak September.
