According to Bloomberg's unanimous expectations, analysts expect Meta's Q4 revenue to be $47 billion, up 17% year-on-year. Adjusted EPS is expected to grow 27% YoY to $6.77. Adjusted net income will be $17.84 billion, up 27.3% from a year earlier.
Meta Platforms, Inc. is set to release its Q4 2024 financial results on Jan 29 after the US market closes.
Previous Quarter Review
Meta reported weaker-than-expected user numbers and warned of a significant acceleration in its infrastructure expenses in 2025 in its third-quarter earnings report on Oct. 30.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
Earnings per share: $6.03 vs. $5.25 expected
Revenue: $40.59 billion vs. $40.29 billion expected
Sales in the third quarter jumped 19% year over year while net income grew 35% to $15.7 billion from $11.6 billion a year earlier. That represents Meta’s lowest year-over-year growth for net income since the second quarter of 2023.
The company reported 3.29 billion daily active people for the third quarter. That was up 5% year over year but came in below analysts’ expectations of 3.31 billion.
Q4 Results Outlook
Meta's ad pricing and engagement likely got a boost in 4Q amid growing uncertainty over a TikTok ban in the US.
The use of Meta AI by about 20% of its monthly active users may continue to aid its ad-targeting advantage over smaller peers including Snap and Pinterest.
With the recent announcement of new layoffs, we expect the company maintain its adjusted operating margin above 40% in 2025 and possibly curtail investments in Reality Labs, where monetization should remain challenged with competition growing in the smart glasses category.
Meta's comments on the size and compute required for its Llama 4 model training and deployment suggest capital spending could be higher than consensus of $51 billion in 2025.
Analyst Opinions
Analysts’ consensus opinion on META stock is bullish, with a “Strong Buy” rating overall. Out of 51 analysts covering the stock, 43 advise a “Strong Buy” rating, two suggest a “Moderate Buy” rating, four give a “Hold,” and recommend two “Strong Sell.” META’s average analyst price target is $667.58, indicating a potential upside of 9.7% from the current levels.
Goldman Sachs analyst Eric Sheridan maintained a Buy rating on Meta and raised the 12-month price target from $630 to $688 to reflect higher revenue estimates on the back of positive channel checks.
The Goldman analyst highlighted the possibility for Meta to achieve compounded mid-teens revenue growth in the fourth quarter and sustain that momentum into 2025.
In the note, Sheridan pointed to several advertising opportunities to support his outlook, including the potential for Meta to boost advertising revenue by increasing ad load on Reels. The Goldman analyst also believes that Meta has yet to fully utilize WhatsApp and Messenger for ad revenue.
Sheridan noted that Meta has significant untapped potential in areas such as click-to-message ads and paid messaging. The analyst also acknowledged the possibility of advertising dollars being redistributed to platforms like Meta if the Protecting Americans from Foreign Adversary Controlled Applications Act is upheld and TikTok is banned in the U.S.
“Based on our advertising checks, Meta continues to see strong momentum in its core advertising business and should drive above-industry topline growth over the next several quarters,” Sheridan said in the note.
Additionally, the analyst sees upside potential for Meta from several long-term AI revenue opportunities, including sponsored search results within Meta AI conversations and licensing its Llama AI models for enterprise use. However, Sheridan noted that these products are early in their lifecycles, and better visibility into their development and adoption is needed before factoring them into forecasts as material revenue drivers.
“We see a path to Meta delivering toward the top end of its revenue guidance range for Q4'24 and sustained ~mid-teens % total revenue growth through 2025,” the Goldman analyst said.
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