TLDR
- Meta stock closed Tuesday near $694 and was down about 2% Wednesday morning ahead of Q3 results.
- Options traders expect a move of up to 6% by week’s end, a range of $650 to $738.
- Analysts expect revenue of about $63 billion, up 24%, but costs are rising faster than sales.
- Capex may hit $145 billion this year, and free cash flow is not expected back until 2029.
- 18 of 19 analysts say buy, with a mean price target of $881.
Meta Platforms (META) stock closed Tuesday near $694 and was down about 2% on Wednesday morning. The company reports third-quarter results after the close today.
Options pricing points to a move of up to 6% by the end of the week. That range runs from about $650 to $738.
The stock is up roughly 5% for the year. It rallied last month on early Muse AI wins, then gave back some gains on worries about AI spending.
What Analysts Are Looking For
Wall Street expects revenue of about $63 billion, up 24% from a year ago. Meta has topped revenue estimates for 16 quarters in a row.
Earnings per share forecasts vary by source, with $6.54 in one report and $5.29 in another. Last year’s figure was $1.05.
That quarter included a large noncash tax charge. Meta said EPS would have been $7.25 without it.
Operating income is expected to dip slightly from last year. Costs are growing faster than sales.
Meta has flagged a $10 billion charge tied to its August multistate settlement over child-safety issues. Last quarter carried $2.4 billion in legal costs and $1.2 billion in severance.
Spending and the Muse Test
Capital spending may reach $145 billion this year. Meta also had nearly $700 billion in long-term supply and lease commitments at last count.
Free cash flow has dried up, and Meta does not expect it back until 2029. That is a long wait for investors who like seeing cash.
Muse launched in the second week of September. Similarweb puts it at over 3 million daily users, which is under 0.1% of Meta’s user base.
Meta also unveiled new Wonder AI models last week that it says rival those from OpenAI and Anthropic. Muse can complete retail purchases for a small fee, though Amazon is blocking it.
Morgan Stanley’s Brian Nowak raised his price target to $820 from $775 and kept an Overweight rating. He told investors to keep adoption expectations reasonable.
Deutsche Bank made a more upbeat point in a Friday note. Its analysts said Muse and other launches put Meta “at the start of a rich product cycle.”
Of the 19 analysts tracked by Visible Alpha, 18 recommend buying the stock and one is neutral. The mean target is $881, nearly 27% above Tuesday’s close.
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