Meta Platforms, Inc. META reported better-than-expected first-quarter results after Wednesday’s closing bell. Analysts are weighing in on the report while investors drive the stock’s price higher.
Q1 Results: Meta reported earnings of $6.43 per share, easily beating analyst estimates of $5.21 per share, and total revenue was up 16% on a year-over-year basis. Advertising drove revenue with ad impressions jumping 5% and average price per ad increasing by 10% year-over-year.
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Key Takeaways:
JPMorgan analyst Doug Anmuth highlighted Meta’s new AI models Andromeda and GEM delivering tangible improvements in advertising. Andromeda, powered by advanced hardware, has increased ad quality by 8%, while GEM has boosted ad conversions on Reels by up to 5%.
- JPMorgan reiterated Meta as a “top pick” with an Overweight rating and $675 price target.
Goldman Sachs analyst Eric Sheridan pointed to CEO Mark Zuckerberg‘s list of five AI-driven opportunities: improved advertising, more engaging user experiences, business messaging, Meta AI and AI devices – notably, Ray-Ban Meta AI glasses, which saw three times sales and more than four times active users year-over-year.
- Goldman Sachs maintained a Buy rating on the stock and raised the price target from $685 to $690.
KeyBanc Capital Markets analyst Justin Patterson said he was not surprised to see Meta raise its fiscal 2025 capex guidance from a range of $60 billion to $65 billion to $64 billion to $72 billion.
- KeyBanc maintained its Overweight rating on Meta stock and raised its price target from $645 to $655.
BofA Securities analysts see Meta as well-positioned to thrive in a softer macro-economic environment and highlighted the company’s capex spend as “building a foundation for long-term growth.”
- BofA Securities reiterated its Buy rating and raised the price target on Meta shares from $640 to $690.
Wedbush analyst Scott Devitt agreed that Meta’s increased capex spend will support its core business and said its second-quarter guidance was “encouraging.”
“Following results, we are increasingly constructive on the range of potential outcomes this year for Meta,” the analyst said.
- Wedbush maintained Meta with an Outperform and raised the price target from $680 to $750.
Guggenheim analyst Michael Morris highlighted strong demand across the company’s portfolio of platforms and sees Meta’s ad business continuing to grow.
“We continue to view Meta as the best positioned digital ad player, particularly with more supply coming online later this year,” the analyst wrote.
- Guggenheim maintained a Buy rating on Meta and raised its price target from $675 to $725.
The Flip Side: Not all analysts were as impressed with Meta’s first-quarter and management commentary, however.
Needham analyst Laura Martin reiterated an Underperform rating on Meta shares. She questioned the company’s long-term terminal value, noting that Meta does not control its distribution or content and faces stiff competition from Apple, TikTok and YouTube.
TD Cowen analyst John Blackledge maintained a Buy rating, but lowered the price target from $725 to $700. Blackledge sees Meta’s key risks as engagement declines among younger users, regulatory and legal headwinds, competition from platforms like TikTok and the high cost of Reality Labs.
META Price Action: According to Benzinga Pro, Meta Platforms shares were up 4.8% at $575.36 at the time of publication Thursday.
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