Meta Platforms(US:META) HTSC·2026-01-31 07:45Investment Rating - The report maintains a "Buy" rating for the company with a target price of $896.00 [1]. Core Insights - The company reported a 24% year-over-year revenue growth in Q4 2025, reaching $59.9 billion, exceeding consensus expectations by 2.5% [4]. - The net profit for Q4 2025 increased by 9.3% year-over-year to $22.8 billion, also surpassing expectations by 8% [4]. - The company expects Q1 2026 revenue to be between $53.5 billion and $56.5 billion, higher than the anticipated $51.3 billion, with currency fluctuations contributing a 4% revenue increase [4]. - The company is projected to accelerate capital expenditures (Capex) in 2026, with an estimated spending of $115 billion to $135 billion [7]. - The introduction of new AI models is expected to enhance advertising effectiveness, contributing significantly to revenue growth [13]. Financial Projections and Valuation - Revenue projections for 2026 and 2027 have been increased by 7.2% and 12.8% to $254 billion and $304 billion, respectively, driven by the launch of more AI products [9]. - The net profit forecast for 2026 and 2027 has been adjusted downwards by 3.6% and 2% to $76.5 billion and $90 billion, respectively, due to rising R&D expenses and depreciation [9]. - The report introduces a new revenue forecast for 2028, estimating $353 billion in revenue and $105.8 billion in net profit [9]. - The target price of $896 corresponds to a 29.65x PE ratio for 2026, slightly adjusted from the previous $900 target [9]. Business Segment Performance - Advertising revenue in Q4 2025 grew by 24% year-over-year to $58.1 billion, with average revenue per user (ARPU) increasing by 16% [5]. - The company’s other revenue streams, including WhatsApp paid messaging and subscription services, saw a 54% increase year-over-year [5]. - The Reality Labs segment experienced a 12% decline in revenue to $960 million, attributed to a high base from previous quarters [5]. Strategic Developments - The Threads platform is expected to contribute between $2.3 billion and $6.5 billion in net profit for 2026, with a projected average daily active user (DAU) of approximately 220 million [14]. - The company has initiated the Meta Compute plan, aiming to build extensive computing facilities over the next decade, with significant investments in chip and energy sectors [16]. - Meta has acquired Limitless, an AI wearable device company, to enhance its audio processing and memory capabilities, complementing its existing hardware offerings [19]. Regulatory Environment - The company is currently facing an antitrust investigation by the EU regarding WhatsApp, which may have long-term implications but is not expected to have immediate substantial impacts on operations [17].