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Meta Platforms rosy Q3 outlook
In its second-quarter earnings report from July, Meta reported earnings of $5.16 per share, beating Wall Street’s projection of $4.73. The company generated $39.07 billion in revenue, surpassing the expected $38.31 billion.
Meta provided an optimistic forecast for the third quarter, projecting revenue from $38.5 billion to $41 billion, above analysts’ $39.1 billion target.
Related: Analyst revisits Meta stock price target as Facebook parent ramps AI spend
“We had a strong [second] quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year,” said Zuckerberg, “We’ve released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we’re driving good growth across our apps.”
Advertising sales remain the company’s main revenue source, making up over 98% of total earnings. Fueled mainly by the Facebook and Instagram apps, ad revenue rose 21.6% in Q2 compared to the previous year.
Meta is set to report its third-quarter earnings on Wednesday, Oct. 30.
Analyst lift Meta stock price target before Q3 earnings
Meta’s sales continue to impress investors. UBS raised the Meta Platforms price target to $690 from $635 on Oct. 7, keeping a buy rating.
Ad budgets accelerated in August into September due to an uplift from a brand advertising recovery and improved consumer sentiment, the analyst tells investors in a research note pulled by thefly.com. Meta also benefited from political spending, optimization, and efficiencies, UBS says.
Guggenheim also raised the Meta’s price target to $665 from $600 and with a buy rating.
Guggenheim expects investor attention on Q4’s ad-driven revenue forecast, projected at $47 billion versus the $46.2 billion consensus. Additionally, investors may look for 2025 guidance on expenses and capex and new insights on AI investment returns, the analyst says.
Guggenheim believes Meta remains the top destination for incremental ad dollars, supported by recent channel checks and industry-wide data trends in Q3.
In August, Barclays raised Meta’s price target to $550 from $520 and kept an overweight rating after Q2 earnings.
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The analyst described Meta in a note as “the best pace of any company in digital advertising, with little revenue deceleration despite facing very tough comps in the second half of 2024.”
Meta Platforms traded at $592.89 per share on October 8. The stock is up more than 70% year-to-date.
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