Meta Platforms(US:META) ZACKS·2025-02-19 14:10Core Insights - Meta Platforms Inc. is experiencing steady user growth, particularly in the Asia Pacific region, driven by increased engagement across its platforms like Instagram, WhatsApp, Messenger, and Facebook [1] - The company's AI-driven platform is enhancing ad delivery efficiency, leading to a significant increase in advertising revenues [1][3] Business Performance - In Q4 2024, Meta's earnings surpassed estimates, with family daily active people (DAP) reaching 3.35 billion, exceeding the average estimate of 3.33 billion [2] - Average Revenue Per Person (ARPP) was reported at $14.25, above the estimate of $13.85, while advertising revenues hit $46.78 billion, a 20.9% year-over-year increase [3] AI and Technology Advancements - Meta is leveraging AI to enhance user experience across its platforms, with generative AI tools being utilized by 4 million advertisers, up from 1 million six months ago [5][7] - The company plans to invest $60-$65 billion in AI infrastructure in 2025, an increase from the previously expected $50 billion [8] Future Projections - The Zacks Consensus Estimate for Q1 2025 indicates revenues of $41.44 billion, a 13.7% year-over-year improvement, and earnings per share (EPS) of $5.61, reflecting a 19.1% increase [9] - The estimates for 2026 show potential increases of 13.3% for revenues and 13.2% for EPS [11] Valuation Metrics - Meta's forward P/E ratio stands at 27.63X, lower than the industry average of 29.86X and the S&P 500's 18.88X [12] - The company has a return on equity of 38.17%, significantly higher than the industry average of -0.62% [12] Stock Performance - Year-to-date, Meta's stock price has increased by 22.2%, outperforming the S&P 500's 4.5% gain and the Nasdaq Composite's 3.9% [15] - The current short-term average price target for Meta shares suggests a potential upside of 30.5% from the last closing price of $716.37 [13]