On Tuesday, Meta Platforms Inc. (NASDAQ: NASDAQ:META) stock received a Buy rating from Pivotal Research, with a new price target set at $780. The research firm highlighted Meta's status as the leading social media company worldwide, citing its substantial daily active user base of 3.3 billion across its platforms, including Facebook, WhatsApp, Instagram, Reels, Stories, and Facebook Messenger.
Pivotal Research commended Meta's management for its proven track record in developing new products and enhancements, particularly in response to competitors. The firm anticipates robust revenue growth for Meta, driven by increased usage, the introduction of new products, improved targeting, and higher pricing.
This growth is expected to be further supported by cost efficiencies gained through artificial intelligence and a significant reduction in Reality Labs' losses.
The research firm's outlook for Meta is bolstered by what it considers an attractive valuation. Meta's earnings per share (EPS) for 2025 are valued at approximately 24 times, and when factoring out 90% of Reality Labs' losses, the valuation is closer to 19 times EPS. Pivotal Research expressed confidence in CEO Mark Zuckerberg's ability to steer Meta successfully in an ever-evolving world propelled by rapid advancements in AI.
The endorsement from Pivotal Research underscores Meta's potential for increased profitability and market dominance. With its array of popular social media platforms and ongoing innovations, Meta appears well-positioned to capitalize on the opportunities presented by AI and the digital landscape.
In other recent news, Meta Platforms Inc. has been a focal point of several analyst updates and regulatory news. Monness, Crespi, Hardt raised Meta's 12-month price target to $620, maintaining a Buy rating due to the company's AI and metaverse potential. Rosenblatt Securities also increased its price target for Meta to $811, citing strength in AI and VR/AR. Meanwhile, Meta was hit with a €91 million fine by Ireland's Data Protection Commission for a security lapse involving user password storage.
Oppenheimer maintained its Outperform rating on Meta following the company's annual "Meta Connect" developer event, which showcased technological advances, including a lower-cost mixed-reality headset and updates to its AI capabilities. Furthermore, Stifel reiterated a Buy rating on Meta, expressing confidence in the company's AI focus.
These are among the recent developments in Meta's business landscape. As a reminder, this article reports on recent news and does not make any predictions or personal opinions. The information provided is based on past articles and is intended to offer a snapshot of recent events involving Meta Platforms Inc.
InvestingPro Insights
Meta Platforms' strong market position, as highlighted by Pivotal Research, is further supported by recent financial data and insights from InvestingPro. The company's market capitalization stands at an impressive $1.45 trillion, reflecting its dominant status in the social media landscape.
InvestingPro data reveals that Meta's revenue for the last twelve months as of Q2 2024 reached $149.78 billion, with a robust revenue growth of 24.28% over the same period. This aligns with Pivotal Research's expectations of strong revenue growth driven by increased usage and new product introductions.
The company's financial health is underscored by two key InvestingPro Tips. Firstly, Meta "holds more cash than debt on its balance sheet," indicating a strong financial position. Secondly, it boasts "impressive gross profit margins," with the latest data showing a gross profit margin of 81.49% for the last twelve months as of Q2 2024. These factors contribute to Meta's ability to invest in innovation and AI advancements, as noted in the Pivotal Research analysis.
Meta's valuation metrics also support the research firm's outlook. The company's P/E ratio (adjusted) stands at 26.86, which, when considered alongside its growth prospects, suggests a potentially attractive valuation. This is further reinforced by an InvestingPro Tip stating that Meta is "trading at a low P/E ratio relative to near-term earnings growth."
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips on Meta Platforms, providing a deeper understanding of the company's financial health and market position.
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