Meta Platforms META stock has experienced a remarkable ascent of over +60% in the current year, hitting record-breaking highs of $576 per share on Wednesday. The burning question on investors’ minds: is there more room for growth in the stock of this social media pioneer?
To ascertain the feasibility of further gains, let’s unpack what’s propelling Meta’s stock higher and assess the potential for META to climb even higher from its present levels.
Image Source: Zacks Investment Research
META Stock: Strong Financial Performance
Highlighted in the EPS surprise chart above is Meta’s outstanding track record of surpassing the Zacks EPS Consensus for seven consecutive quarters, with an average earnings surprise of 12.61% in its last four quarterly reports.
Pointing to the company’s rising potential, Meta recently reported Q2 EPS of $5.16 in July, surpassing estimates by 10% and surging 60% from $3.23 per share in the corresponding quarter.
Image Source: Zacks Investment Research
META Earns Positive Analyst Ratings
Fueling the momentum further is Meta’s strong financial performance and the optimistic outlook from analysts. Of the 45 brokers covering Meta’s stock and contributing data to Zacks Investment Research, 39 hold a strong buy rating.
At present, Meta boasts an average brokerage recommendation (ABR) of 1.33 on a scale of 1 to 5 (Strong Buy to Strong Sell).
Image Source: Zacks Investment Research
META’s Innovation and Product Expansion
Echoing the positive sentiment, analysts continue to be bullish on Meta’s prospects in artificial intelligence. During its annual conference, Meta CEO Mark Zuckerberg revealed that Meta AI is one of the most utilized AI assistants globally, with nearly 500 million monthly users.
The “Meta Connect 2024” event introduced new Meta AI updates, featuring natural voice interactions beyond text. These AI voice interactions are now available across all of the company’s primary apps (Instagram, WhatsApp, Messenger, Facebook) and will compete with Alphabet’s GOOGL Google Gemini Live and OpenAI’s Advanced Voice Mode.
Moreover, Meta is set to expand its business AI solutions to enhance customer service, support, and commerce facilitation. Additionally, Meta unveiled upgraded versions of its virtual reality headset (Quest 3S VR) and offered a glimpse of its Orion augmented reality glasses, touted as the most advanced AR glasses ever created, blending the aesthetics and functionality of regular glasses with immersive AR capabilities.
Monitoring META’s Stock Valuation
One factor contributing to the surge in Meta shares is the company’s attractive valuation compared to many of its tech counterparts. META currently trades at 26.3X forward earnings, representing a modest premium to the S&P 500’s 24.2X.
Furthermore, META still trades at a significant discount to its decade-long high of 74.5X forward earnings but slightly above the median of 25X during this period.
Image Source: Zacks Investment Research
Bottom Line
After an exceptional rally year-to-date, Meta Platforms stock holds a Zacks Rank #3 (Hold). While better entry points may emerge, it would not be surprising if META continues its upward trajectory, with the Average Zacks Price Target of $579.19 per share indicating a potential 3% upside.
7 Best Stocks for the Next 30 Days
Just released: Elite analysts distill 7 top stocks from a current roster of 220 Zacks Rank #1 Strong Buys. These tickers are labeled as “Most Likely for Early Price Pops.”
Since 1988, this exclusive selection has outperformed the market by over 2X, boasting an average annual gain of +23.7%. Make sure to prioritize these 7 handpicked stocks for immediate attention.
Meta Platforms, Inc. (META) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Click here to read this article on Zacks.com.
The opinions and viewpoints expressed in this piece are those of the author and not necessarily aligned with those of Nasdaq, Inc.
