TLDR
- Meta Platforms stock jumped 6% after Jefferies named it a Top Pick with a $910 price target before Q4 earnings
- The stock has dropped 18% since Q3 earnings, creating what analysts call a compelling entry point
- Q4 earnings on January 28 are expected to show $8.19 EPS and $58.35 billion revenue
- WhatsApp revenue could reach $36 billion by 2029, up from $9 billion currently
- Wall Street consensus shows Strong Buy rating with 37 Buy recommendations
Meta Platforms reports fourth-quarter earnings on January 28. Jefferies analyst Brent Thill just reiterated his Buy rating with a $910 price target.
The stock rose 6% Thursday as Jefferies called it a Top Pick. META has fallen 18% since releasing third-quarter results.
Thill sees this pullback as a buying opportunity. Wall Street expects earnings per share of $8.19 for the quarter.
Revenue estimates stand at $58.35 billion, reflecting 20.6% year-over-year growth. The company continues showing strong top-line momentum.
Valuation Gap Creates Opening
Thill listed five reasons backing his bullish view. META now trades at an “8-turn PE discount” to Alphabet.
This valuation gap represents a rare opportunity between the two tech giants. The analyst sees limited downside risk from current levels.
Revenue strength and efficiency gains should offset rising operating expenses. Meta’s recent “all-star AI hires” add confidence for 2026 performance.
HSBC maintains a Buy rating with a $905 price target. The bank credits Meta’s AI investments for driving advertising business growth.
AI technology improves ad targeting and boosts user engagement. Meta posted 82.01% gross profit margins in recent periods.
Revenue grew 21.27% over the trailing twelve months. The operational performance remains solid despite investor concerns.
Capital Spending Ramps Up
Meta guided capital expenditure growth will surpass the $32 billion increase seen in 2025. Market consensus projects $39.4 billion in capex growth for 2026.
Total expenses will accelerate faster in 2026 than 2025. Analysts forecast 23% expense growth this year and 28% next year.
Some investors worry about margin pressure from heavy spending. Others question whether AI execution will meet expectations.
New Revenue Streams Emerge
WhatsApp currently generates approximately $9 billion in revenue. Thill projects this will hit $36 billion by fiscal 2029.
That’s a four-fold increase over the next few years. Threads and Llama AI provide additional growth avenues.
These products diversify Meta’s revenue beyond traditional advertising. AI continues powering the core advertising flywheel.
The technology drives higher usage and creates more ad inventory. META currently trades at $647.63 with a P/E ratio of 28.56.
Wall Street’s consensus rating is Strong Buy. This comes from 37 Buy calls, six Holds, and one Sell.
The average analyst price target sits at $820.21. That implies 24.5% upside from current levels.
Oracle and Silverlake are leading a group to buy TikTok’s U.S. operations. The deal received approval from both the United States and China.
This transaction could reshape the competitive dynamics in social media. META stock continues benefiting from its market position and AI investments.
