Despite pursuing leadership in open-source and proprietary AI models, Meta Platforms' (META) stock continues to move at a snail’s pace, registering just over 2% returns so far this year. The matters at the company, however, are moving so fast that they’re even giving the President and Vice Chairman Dina McCormick, a headache. McCormick, who has not only worked on Wall Street before but was also the Deputy National Security Advisor for Strategy under Donald Trump, says the work at Meta moves faster than anywhere she’s worked before.
To make things move even faster, the company’s founder and CEO, Mark Zuckerberg, has now moved to the AI lab, where he is “coding all day,” according to McCormick. He is leaving no stone unturned in the pursuit of AI dominance. This news comes just after the company released its Muse Spark AI model on April 8, which is the first model to come out of the Superintelligence group, where Mark currently spends his time. As a result of this release, Meta’s AI app on iOS saw an 87% surge in daily downloads. This rise in consumer interest isn’t visible on the stock price chart, but it could be soon, and that’s why investors are better off taking a position in the stock now.
About Meta Stock
Meta Platforms develops products that help people connect and share with their friends and family across personal computers, mobile devices, AI glasses, and virtual reality (VR) headsets. The company operates in the United States, Europe, Canada, Asia-Pacific, and around the world. It was founded by Mark Zuckerberg, Dustin Moskovitz, Chris R. Hughes, Andrew McCollum, and Eduardo P. Saverin in 2004.
Meta’s stock has mirrored the broader market over the last year as well as this year. At a time when the AI trade is the talk of the town, mirroring the S&P 500 Index ($SPX) doesn't cut it anymore. Investors would therefore take it as underperformance, but underperformance sometimes brings with it an attractive valuation, and that's what is happening with Meta too.
META stock’s sideways movement has made it cheaper on a few metrics. Being one of the Mag 7 stocks, it may come as a surprise to many that the company is trading close to its 5-year average forward P/E. On a forward price-to-cash-flow basis, the 12.5x multiple is much cheaper than the 15x 5-year average. Even the dividend yield of 0.31% is healthier than it was in the past, though nothing impressive for income investors.
These multiples are reasonable for a company expected to grow at 18% in 2027, 13% in 2028, and 21% in 2029, as per Wall Street earnings estimates. Whether they price in a CEO who sits in the Superintelligence AI lab all day is what investors are asking. Zuckerberg has a track record of throwing billions into the bin to pursue modern technologies. If he has learned from the past and is as serious about Superintelligence as the Vice Chairman says he is, this might be the ideal time to ride the stock on its next leg up, which could be massive.
Meta Ends 2025 on a Strong Note
The company reported its fourth quarter FY 2025 results on Jan. 28. Based on the earnings report, revenue for the quarter came in at $59.9 billion, marking a 24% increase compared to last year. Earnings per share reached $8.88. Total expenses rose to $35.1 billion, reflecting a 40% year-over-year (YoY) increase. The growth was mainly driven by higher infrastructure spending, legal costs, and employee compensation. At the end of the quarter, the company had $81.6 billion in cash and short-term investments.
Meta is set to release its first-quarter 2026 earnings on April 29. The company projects total revenue for the quarter to range between $53.5 billion and $56.5 billion. The outlook is supported by a foreign currency tailwind of around 4%. For the full year 2026, expenses are expected to be in a range between $162 billion and $169 billion. This increase is primarily driven by higher spending on infrastructure and technical talent, mainly in AI. Meta is set to announce its next earnings report on April 29.
What Are Analysts Saying About META Stock?
Ahead of its first-quarter earnings, Meta’s price target was raised by Goldman Sachs on April 13. Goldman Sachs analyst Eric Sheridan increased the firm’s price target on the stock from $835 to $840 while maintaining a “Buy” rating. The positive analyst sentiment before the earnings report signals a strong quarter ahead.
Based on 56 Wall Street analyst estimates, META stock has a consensus “Strong Buy” rating. The consensus “Strong Buy” rating highlights strong analyst support for the stock. It has a mean price target of $856.06, offering approximately 27% upside from the current levels.
On the date of publication, Jabran Kundi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
- Nike Stock Options Alert: LEAPS Buying Hints at a Bull Call Spread
- Netflix Stock Plummets After Q1 Earnings: Is It Time to Buy the Dip in NFLX?
- Microsoft Stock Could Be 25% Undervalued Based on Its FCF and Analysts' Estimates
- Apple Stock: Why the Dow’s Best-Looking Chart Is Rotting from the Inside Out
