On Monday, Wolfe Research reiterated its positive stance on Meta Platforms Inc. (NASDAQ:NASDAQ:), maintaining an Outperform rating and a $730.00 price target for the company’s shares. The stock is currently trading at $604.63, close to its 52-week high of $638.40, reflecting strong market sentiment. According to InvestingPro’s analysis, Meta maintains an “EXCELLENT” financial health score of 3.22, supported by impressive gross profit margins of 81.5%.
Analysts at the research firm believe that the market has not yet fully factored in the potential financial benefits of Meta’s initiatives in unifying video and monetizing Threads. According to Wolfe Research, these factors are not fully reflected in consensus estimates, which could mean upside potential for the company’s advertising revenue and earnings per share (EPS).
The firm’s forecast for Meta’s FY2026 EPS is 5% above consensus, driven by the potential impact of video unification on the company’s advertising revenue and EPS. With a current P/E ratio of 27.65 and strong revenue growth of 23.06% over the trailing twelve months, Meta’s fundamentals support this optimistic outlook. InvestingPro subscribers have access to 13 additional key insights into Meta’s growth potential and financial health, as well as comprehensive Pro research reports that provide in-depth analysis of the company’s performance.
Estimates from Wolfe Research suggest that Meta’s 2025 EPS could beat market expectations by 5.5%. Analysts have quantified the effects of Threads’ video unification and monetization, estimating that Threads could generate $3 billion to $4 billion in revenue in 2026. They see this as a growing opportunity beyond this year.
Meta began the process of unifying its video player across its platforms in June 2024, aiming to shift the content mix towards more short-form videos. Since rolling out the unified video and prediction systems, time spent on Facebook videos has increased 10% year-over-year. Additionally, Meta introduced full-screen immersive viewing in UCAN in October 2024, with plans to scale in early 2025. Wolfe Research sees the transition from legacy video as a factor underestimated by the market, noting that the time spent on Facebook Reels only represents 33% of total video hours, compared to 50% for Instagram Reels.
Analysts at Wolfe Research expect more than half of time spent on Facebook to be spent on video, with short-form videos making up more than 40% of the mix. They predict that these videos will monetize at over $3 CPM with an ad load exceeding 30%. Regarding Threads, the firm anticipates a $3 billion to $4 billion revenue opportunity in 2026, assuming an ad load and monetization rate comparable to Twitter on a per-session basis, with approximately 785 million monthly active users (MAU ) by the end of 2026.
With a current market capitalization of $1.53 trillion for Meta and the next earnings report scheduled for January 29, 2025, investors looking for detailed analysis of Meta’s growth initiatives can access comprehensive valuation metrics and Expert insights via InvestingPro’s extensive financial toolkit. Wolfe Research suggests that Threads’ revenue potential is not yet fully included in consensus estimates and presents an attractive medium-term monetization opportunity.
In other recent news, Meta Platforms Inc. has received several significant updates. Wolfe Research recently increased its price target for Meta from $670 to $730, maintaining an Outperform rating. The firm anticipates Meta’s financial performance will exceed current estimates, citing potential growth drivers such as the integration of video across platforms and potential returns on capital invested in advances in artificial intelligence.
Additionally, Meta recently named Joel Kaplan as its new Chief Global Affairs Officer, a move that attracted considerable attention. Kaplan is expected to take over key responsibilities including Facebook’s content policy and elections.
Analyst firms such as JMP Securities and RBC Capital have also expressed confidence in Meta’s growth potential. JMP Securities increased the price target for Meta to $750, maintaining a market Outperform rating, while RBC Capital maintained its Outperform rating and raised its price target to $700. Both firms highlighted the company’s advances in artificial intelligence as key catalysts for growth.
Canaccord Genuity also maintained a positive stance on Meta, raising the company’s price target from $700 to $730 and recognizing the company’s growth prospects in ad creative generation and enterprise messaging.
This article was generated and translated with the help of AI and reviewed by an editor. For more information, see our T&Cs.
