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Takeaways
- Meta is expected Wednesday to release its results for the first quarter.
- Analysts are bullish about the tech giant. Revenue and profit are expected to increase by more than 10% in the next year.
- Ongoing legal and regulatory concerns could negatively impact Meta's business.
Meta Platforms is scheduled to report its first quarter results after the close of markets on Wednesday. Analysts are still bullish on Facebook’s parent company despite uncertainty over tariffs and legal disputes.
Of the 27 analysts covering the stock tracked by Visible Alpha, 25 call Meta a "buy," while just two have a "hold" rating. The stock has an average price target near $695, a roughly 27% premium to Friday's closing level of about $547.
Meta, parent company of Facebook Instagram and WhatsApp is expected to report earnings of $5.24 per share on revenue of 41.35 billion dollars, which would be an 11% increase and 13% respectively from a previous year.
Morgan Stanley analysts recently wrote that Meta could be affected by a tariff-driven pullback in advertising by Chinese companies. However, they said that the firm would be better positioned than Alphabet (GOOGL) Google (AMZN) or Alphabet (GOOGL).
Recent headlines are dominated by Regulatory and Legal Concerns
Legal and regulatory disputes have nagged Meta, with the European Union this week fining the tech giant 200 million euros ($227.5 million) for violating its Digital Markets Act. Meta plans to appeal the fine.
Meta’s trial for antitrust began in this month. The Federal Trade Commission has asked Meta to sell Instagram or WhatsApp or spin them off. They also claim that Meta used an “illegal scheme to buy-or bury” competitors to maintain their dominance.
Meta shares are down 7% by 2025. They have lost a quarter since they hit an all-time peak of $740 in February, amid the historic market turmoil which has affected the Magnificent Seven companies.
