On Friday, Meta Platforms Inc. (NASDAQ: NASDAQ:META) received a new stock rating from Huatai Financial. The firm initiated coverage with a Buy rating and set a price target of $688.08 for the social media giant. The analyst cited Meta's expansive user base as a key competitive advantage, noting that the company's daily active people (DAP) across all platforms total 3.29 billion. With a market capitalization of $1.44 trillion and an impressive YTD return of 61%, Meta maintains a "GREAT" financial health rating according to InvestingPro analysis.
The report from Huatai Financial highlighted the potential for Meta to continue expanding its market share from 2024 through 2026. This growth is expected to be driven by users spending more time on short videos and the company's use of artificial intelligence in its online advertising business. The analyst pointed to Meta's Llama open-source AI as a particular strength. The company's robust gross profit margin of 81.5% and strong revenue growth of 23% in the last twelve months support this optimistic outlook.
Huatai Financial's forecast for Meta's revenue indicates a robust growth trajectory, with increases of 22%, 16%, and 13% over the years 2024 to 2026 respectively. The firm projects net profits for Meta to reach significant figures of $55.7 billion, $67.4 billion, and $76.8 billion during the same period.
The firm's target price of $688.08 for Meta's stock is based on a 25.8 times multiple of the company's projected 2025 earnings per share (EPS). The optimistic outlook is rooted in Meta's strong fundamentals and innovative strides in the digital advertising space.
The initiation of coverage by Huatai Financial with a Buy rating reflects confidence in Meta Platforms' future performance and its ability to maintain a dominant position in the social media and online advertising industries.
In other recent news, Meta Platforms Inc. reported a robust growth in its Q3 2024 earnings with a 19% increase in total revenue year-over-year to $40.6 billion. Daily active users across Meta's apps exceeded 3.2 billion, contributing significantly to the revenue. However, the Reality Labs segment experienced an operating loss despite revenue growth. Looking ahead, Meta anticipates further growth in 2025 driven by AI and infrastructure investments.
Raymond (NS:RYMD) James reaffirmed its Strong Buy rating on Meta's shares, citing potential for growth in AI and generative AI (GenAI) monetization. The firm predicts advancements in Meta's recommendation model to increase user engagement and create a market opportunity exceeding $10 billion by 2026 in sectors like travel and entertainment. Despite high capex forecasts, Raymond James suggests that the buy side may have already accounted for these levels.
Monness Crespi Hardt raised its price target on Meta from $620 to $650, noting stronger market sentiment for Meta compared to Alphabet (NASDAQ:GOOGL). The firm highlighted the potential for a stronger advertising revenue cycle bolstered by AI enhancements. Meanwhile, ValueAct Capital acquired a $1 billion stake in Meta, marking one of ValueAct's largest investments to date.
On the legal front, the U.S. Supreme Court declined to rule on a securities fraud lawsuit against Meta, leaving the lower court's decision intact. The lawsuit alleges that Meta misled investors about how user data was being misused on its platform. Additionally, U.S. District Judge Yvonne Gonzalez Rogers (NYSE:ROG) ruled that Meta's CEO, Mark Zuckerberg, cannot be held personally liable in a series of lawsuits alleging that the company's social media platforms have caused addiction in children.
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