Key points
- The 2024 Meta stock forecast suggests more upside.
- Meta’s social media algorithms have helped increase engagement and monetization.
- Meta is investing aggressively in building the metaverse.
Meta Platforms (META) has been one of the top tech stocks of 2024.
More impressive growth is expected for Meta this year and into 2025. The company’s history of outperformance suggests the next two years could be very lucrative.
How has the Meta stock price performed?
Meta exceeded analyst earnings and revenue growth expectations in early 2024. The social media giant has tremendous positive momentum as it looks to integrate artificial intelligence technology into its social media platforms.
After a big 2023 rally and a huge earnings beat in the fourth quarter, Meta is again making new all-time highs, smashing over $500 per share in March 2024.
The tech stock has been an exceptional investment in almost any time frame you choose. Over the past five years, Meta investors have enjoyed a 207% gain, compared to an 87% total return for the S&P 500.
Since its initial public offering, Meta has generated a total return of more than 1,200%. The company that initially went public under the name Facebook priced its stocks at $38 per share for its IPO in 2012. META hit an all-time high of $523 in March 2024.
Meta earnings
Meta reported $40.1 billion in revenue in the most recent quarter, up 24.7% from a year ago. Net income was up 201.3% to $14 billion in the quarter. At the same time, operating expenses increased 4.6% to $15 billion.
The company reported $20.7 billion in earnings before interest, taxes, depreciation and amortization, a 54.7% increase from last year.
Meta smashed consensus analyst earnings expectations in the past four quarters. That includes a 7.5% beat in the most recent quarter.
Meta at a glance
CEO Mark Zuckerberg founded Facebook as a student at Harvard University in 2004. The company has since evolved through strategic acquisitions and directional pivots.
Today, Meta Platforms operates one of the world’s largest collections of social media networks, including its core Facebook platform, Messenger, Instagram and WhatsApp.
As of the end of 2023, the company has 3.98 billion monthly active people on its family of apps, a 6% increase from the end of 2022.
Meta makes money primarily from its advertising business and is one of the world’s most successful and valuable companies, valued at $1.3 trillion.
Meta controversies
Meta has been embroiled in its fair share of controversy over the years.
British consulting company Cambridge Analytica collected Facebook users’ data without their consent and attempted to use it to influence global elections, including the 2016 U.S. presidential election. Meta agreed to pay $725 million to settle a class-action lawsuit tied to the Cambridge Analytica scandal in 2022.
Facebook’s content algorithm was also found to reduce the spread of credible journalism and promote content posted by friends and family. Opponents of the social media site say this resulted in a rise in conspiracy theories, misinformation and hate speech on the platform.
In December 2020, the Federal Trade Commission sued Facebook for allegedly breaking antitrust laws by maintaining a social networking monopoly. The case has not gone to trial yet.
Facebook IPO
Facebook went public with an IPO price of $38 in May 2012. At that time, it had 845 million users with more than $100 billion in valuation, making it one of the highest-profile technology IPOs ever.
But the stock stumbled out of the gates. By August 2012, Meta stock was down more than 50% from its IPO price.
Ultimately, Zuckerberg’s company found a way to monetize its massive global user base.
Impressive advertising revenue growth helped propel Facebook shares back above their IPO price by 2013, and the stock has mostly trended higher ever since.
Meta hit an all-time intraday high of over $520 in March 2024 after the company reported net income more than tripled in the fourth quarter and announced its first-ever dividend.
Why Facebook changed its name to Meta
Zuckerberg rebranded and restructured Facebook in late 2021 as Meta Platforms, highlighting the company’s focus on building the metaverse.
The name change also distanced the company from the Cambridge Analytica scandal and other brand issues and marked a shift in focus to building the metaverse. The company’s stock ticker was changed from FB to META as part of the rebranding effort.
Opportunities and obstacles facing Meta
Meta is well positioned to continue outperforming but faces several potential stumbling blocks ahead. Facebook’s unparalleled social media user base provides advertisers with a massive audience. The company’s valuable data can only help it further optimize its performance.
Ad revenue per user is growing. Not only is it adding new users, but it’s also making more money off existing users. Finally, integrating artificial intelligence technology into Meta’s various platforms and apps will help the company increase engagement. Meta’s future virtual reality and metaverse offerings could be significant growth drivers.
But Meta also faces several challenges. The social media market is intensely competitive. Many younger social media users prefer TikTok, Snapchat and other platforms to Facebook. In addition, social media and Big Tech companies face significant risks from antitrust challenges and new regulations related to mental health, data collection and content moderation.
Realty Labs generated a $13.7 billion loss from operations in 2022 and a $16.1 billion loss from operations in 2023. This metaverse segment will likely continue being a money pit for the foreseeable future.
Strengths
- A massive and valuable global user base creates monetization opportunities.
- AI technology will help optimize Meta’s business, including content moderation, engagement and the spread of information.
- VR and the metaverse could be major long-term growth opportunities.
Weaknesses
- Many younger social media users prefer Snapchat, TikTok and other platforms.
- Meta faces antitrust actions and regulatory crackdowns.
- Metaverse research and development costs are extremely high and will likely weigh on profitability.
Nasdaq: Meta comparison
Meta is one of the top stocks in the Nasdaq composite index, with a weight of 3.23%, as of Dec. 29, 2023.
Meta stock forecast 2024
Analysts are optimistic about Meta’s business and stock price this year, projecting full-year earnings per share of $19.92. That’s up from $14.51 in 2023. In addition, Meta analysts are calling for $158.2 billion in 2024 revenue — a whopping annual growth of 17.3%.
Meta will reap more benefits from AI than any other megacap tech stock, according to Bank of America analyst Justin Post. “Smaller social competitors may find it difficult to keep up with Meta’s growth engine, while we expect Meta to have new products and services for users, creators and advertisers.”
Bank of America has a “buy” rating and $510 price target for Meta stock. CFRA estimates Meta will generate at least $48 billion in free cash flow in 2024 and has a “buy” rating and $500 price target for Meta.
Wall Street analysts covering Meta stock have an average price target of $517. As always, conduct your own research before making important investment decisions.
Meta stock forecast 2025
Analysts forecast 2025 revenue of $178.1 billion, up 12.6% compared with 2024. Estimates like these may rise throughout this year if Meta maintains its current momentum.
Meta stock is already up 46% in 2024. If the stock maintains that level and posts a similar gain in 2025, Meta’s share price could rise above $730, assuming there are no stock splits.
Of course, past performance is no guarantee of future gains. It is extremely difficult for even professional analysts to make accurate long-term predictions about an individual stock’s price.
What can we expect in the coming years?
Meta’s bullish performance in recent years will likely only continue if it can leverage AI technology to maintain its positive engagement and advertising momentum. The company needs to demonstrate it can continue to increase its average revenue per user, particularly by monetizing its messaging assets.
The Reality Labs segment could be the difference between Meta staying on the cutting edge of the tech world or falling behind its Big Tech peers.
Morningstar analyst Ali Mogharabi said Meta deserves credit for exceeding expectations in recent quarters. But he expressed concern that there’s little room for additional upside at its current valuation.
“Meta’s advertising growth may benefit in 2024 from easier comparisons and political ad spending, but we foresee a slowdown in 2025-28 as economic growth moderates,” Mogharabi said.
Frequently asked questions (FAQs)
It’s extremely difficult to predict long-term stock price movement given the range of factors involved, such as investor sentiment surrounding the stock and broad macroeconomic factors.
Meta is one of the world’s most successful and profitable companies. But it’s unclear exactly what it will need to do in the next two years to grow its massive market cap of $1.3 trillion.
The average target among the Wall Street analysts covering Meta stock is $517. Among Meta’s 64 analysts, 47 have a “buy” rating.
Meta implemented its first dividend in early 2024 and has a dividend yield of 0.4%. The company also announced a $50 billion increase in its share buyback authorization after repurchasing more than $20 billion in stock in 2023.
