Buy Meta Stock After Beating Q4 EPS Expectations by 20%?

As one of the headline names of this week’s earnings lineup, Meta Platforms META was able to impressively exceed its fourth-quarter expectations on Wednesday.Correlating with stellar gains over the last few years, Meta has now surpassed earnings expectations for nine consecutive quarters and investors may be wondering if it’s time to buy stock in the social media giant after its latest EPS surprise.Image Source: Zacks Investment Research Meta’s Strong Q4 Results Primarily derived from advertising revenue, Meta’s Q4 sales of $48.38 billion topped estimates of $46.96 billion while stretching 20% from $40.11 billion a year ago.Ad impressions across all apps increased by 6% and 11% year-over-year for the fourth quarter and full year 2024, respectively. Furthermore, average price per ad increased by 14% and 10% YoY. This came on a 5% YoY increase in user engagement with Meta’s DAP (Daily Active People) rising to an average of 3.35 billion.Meta’s profitability increased to $20.83 billion or $8.02 per share, a 50% increase from EPS of $5.33 in the prior year quarter on net income of $14.01 billion. Surpassing the Zacks Q4 EPS Consensus of $6.68 by 20%, Meta’s surprise profit was attributed to AI-driven advertising targeting.Image Source: Zacks Investment Research Meta's Full Year Results Overall, Meta’s total sales increased 22% in fiscal 2024 to $164.5 billion versus $134.9 billion in 2023. Annual earnings came in at $62.36 billion or $23.86 per share, a 60% spike from EPS of $14.87 in 2023 on net income of $39.09 billion.Image Source: Zacks Investment Research Meta’s Revenue Guidance While Meta did not provide a full-year top-line guide, the company expects Q1 2025 revenue to be between $39.5-$41.8 billion with the current Zacks Consensus at $41.37 billion or 13% growth (Current Qtr below).Based on Zacks estimates, Meta’s total sales are projected to increase another 12% in FY26. Zacks projections call for 6% EPS growth in FY25 with Meta’s bottom line projected to increase another 11% next year to $28.37 per share.  Image Source: Zacks Investment Research Meta’s Attractive P/E Valuation Trading around $700, Meta's stock is at a 26.6X forward earnings multiple which is not a stretched premium to the benchmark S&P 500. What may appeal to long-term investors is that META has the second cheapest P/E valuation among its Magnificent 7-themed big tech peers with Alphabet’s GOOGL being the lowest at 22.4X and Tesla TSLA the highest at 123.3X.Image Source: Zacks Investment Research Takeaway For now, Meta Platforms stock lands a Zacks Rank #3 (Hold). It's hard to count META out in regards to more upside after Meta's strong Q4 results but there are reemerging concerns about the company’s increased spending.To that point, Meta projects capital expenditures in the range of $60-$65 billion in 2025 compared to $39.23 billion last year. That said, Meta’s success with AI ad targeting does suggest that increased spending on its artificial intelligence infrastructure could prove to be very lucrative and worth holding META in the portfolio.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Meta Platforms, Inc. (META): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks