Investing·2025-11-07 05:29Core Insights - Meta Platforms experienced a significant stock drop of over 16% following its Q3 2025 earnings report, marking its largest post-earnings decline in three years [2][5] - Despite the market's negative reaction, analyst sentiment remained relatively stable, indicating a potential disconnect between short-term market panic and long-term valuation [3][4] - Analysts project a strong recovery for Meta shares, with an average price target suggesting a potential upside of 29% to nearly $827, and some analysts forecasting even higher targets [6][7] Analyst Sentiment - Following the earnings report, 20 analysts updated their forecasts, with the average price target decreasing by only 5%, significantly less than the actual drop in share price [4] - The consensus price target as of November 5 stands at nearly $827, with some analysts projecting targets as high as $1,117, indicating confidence in a substantial recovery [6][7] Financial Projections - Meta's capital expenditures (CAPEX) are projected to rise dramatically to $71 billion in 2025, up from $39 billion in 2024, with expectations of exceeding $103 billion in 2026 [9] - Cash from operations is expected to be $127 billion in 2026, leading to a projected free cash flow (FCF) of around $24 billion, which would be over 40% lower than the $42.5 billion generated in the past 12 months [10][11] Historical Context - A comparison to Q3 2022 shows that after a similar earnings report, Meta shares dropped over 24% but later rebounded significantly, gaining more than 380% from a low of $97 [12][14] - Past investments in AI have proven beneficial, contributing to an annual revenue run rate of over $60 billion, showcasing Meta's ability to recover and grow despite initial setbacks [14]