On Tuesday, Goldman Sachs (NYSE:GS) analysts, led by Eric Sheridan, increased the price target for Meta Platforms Inc. (NASDAQ:META) to $668, up from the previous $630, while maintaining a Buy rating on the stock. Currently trading at $608.33 and near its 52-week high of $638.40, Meta has demonstrated impressive momentum with a 63% return over the past year.
The analysts expect Meta to continue to benefit from several long-term growth themes, including the expansion of products like Reels, click-to-messaging ads, and AI technologies such as the Advantage+ adoption program. According to InvestingPro, Meta maintains strong financial health with an overall score of "GREAT."
The firm anticipates Meta's compounded mid-teens revenue growth and points out key areas of investment that could drive the company's performance. This outlook aligns with Meta's current revenue growth of 23.06% and impressive gross profit margins of 81.5%. Goldman Sachs has identified potential growth opportunities in Meta AI, AI Agents, Reality Labs, and Llama AI models.
Additionally, the analysts discussed the company's potential to gain incremental revenue in the event of reduced competitive pressure from TikTok, should the ongoing litigation lead to changes in the U.S. market. InvestingPro subscribers can access detailed financial metrics and 13 additional ProTips about Meta's performance and valuation.
Goldman Sachs also provided projections for Meta's future investments, anticipating that the company's compounded capital expenditures and operational expenses will continue to increase. For the year 2025, they expect Meta's total GAAP expenses to reach $116.1 billion, marking a 19% year-over-year increase, and total capital expenditures to amount to $60.2 billion, a significant 53% year-over-year rise.
The analysts' positive outlook on Meta is supported by their view that the company is well-positioned to capitalize on long-term secular growth trends. The update to the price target comes ahead of Meta's fourth-quarter 2024 earnings report, scheduled for January 29, where the market will look for further indications of the company's financial health and strategic direction. With analyst targets ranging from $475 to $811 and a consensus recommendation of 1.52 (Strong Buy), the raised price target reflects confidence in Meta's growth trajectory. For comprehensive analysis and detailed metrics, investors can access Meta's full Pro Research Report, available exclusively on InvestingPro.
In other recent news, the Supreme Court is currently hearing arguments regarding a potential ban on TikTok in the U.S. This move, initiated by a law signed by President Biden, could have significant implications for companies such as Meta and Oracle (NYSE:ORCL). If enacted, the ban could bolster Meta's market share, as suggested by analysts at Morgan Stanley (NYSE:MS). However, Oracle, which hosts TikTok, could experience a loss in revenue.
China Merchants Securities recently initiated a Buy rating for Meta, highlighting the company's strong market position and potential for growth. This positive outlook is bolstered by Meta's solid financial standing and strong profitability, with an impressive 81.5% gross profit margin and 23.06% revenue growth in the last twelve months.
In a strategic move, Meta has begun a trial to allow users in Germany, France, and the U.S. to browse eBay (NASDAQ:EBAY) listings on Facebook Marketplace. This initiative aims to increase visibility for eBay sellers among Facebook users and offer a wider range of listings to Marketplace users.
Additionally, Meta announced a significant shift in its content moderation policy, transitioning from a U.S. fact-checking program to a community-based system. This change is expected to reduce errors and instances of censorship, reinstating the company's foundational principles of free expression.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
META: is this perennial leader facing new challenges?
With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Sure, there are always opportunities in the stock market – but finding them feels more difficult now than a year ago. Unsure where to invest next? One of the best ways to discover new high-potential opportunities is to look at the top performing portfolios this year. ProPicks AI offers 6 model portfolios from Investing.com which identify the best stocks for investors to buy right now. For example, ProPicks AI found 9 overlooked stocks that jumped over 25% this year alone. The new stocks that made the monthly cut could yield enormous returns in the coming years. Is META one of them?
Unlock ProPicks AI to find out