Meta Q4 Earnings Preview: Analysts Say Advertising Strength Could Drive 'Above-Industry Topline Growth'

Social media company Meta Platforms META could cover topics such as politics, the pending TikTok ban and AI spending when the company reports fourth-quarter financial results after market close Wednesday.

Here are the analyst earnings estimates, latest analyst ratings and comments, and key items to watch in the report.

Earnings Estimates: Analysts expect Meta Platforms to report fourth-quarter revenue of $46.99 billion, up from $40.11 billion in last year's fourth quarter, according to data from Benzinga Pro.

The company has beaten analyst estimates for revenue in nine straight quarters.

Analysts expect the company to report fourth-quarter earnings per share of $6.77, up from $5.33 in last year's fourth quarter. The company has beaten analyst estimates for earnings per share in seven straight quarters.

Guidance from the company calls for fourth-quarter revenue to be in a range of $45 billion to $48 billion.

What Analysts Are Saying: Needham analyst Laura Martin raised financial estimates for Meta Platforms figures including revenue and earnings per share in a new investor note.

"Based on our conversations over the past two weeks, we think Meta benefitted from a stronger ad market, and expanding margins in 4Q24," Martin said.

The analyst reiterated an Underperform rating with no price target.

Martin said the conversations took place at CES and the Needham Growth Conference in January.

"We expect this trend to continue into FY25E and FY26E, and we raise estimates. Where we may be wrong is if META hires thousands of AI and genAI engineers to pursue its diverse portfolio of growth initiatives."

Bank of America analyst Justin Post said Meta Platforms could benefit from strength in advertisement and improved AI models for ad targeting in a recent note.

The analyst maintained a Buy rating on Meta with a price target of $710.

Goldman Sachs analyst Eric Sheridan also highlighted Meta's advertising opportunities in a recent note.

The analyst maintained a Buy rating and raised the price target from $630 to $688.

Sheridan said Meta could continue its advertising momentum in 2025 with increased ad load on Reels and untapped potential in areas like click-to-message ads and advertising on WhatsApp and Messenger.

"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.

Here are other recent analyst ratings on Meta and their price targets:

JMP Securities: Reiterated Market Outperform rating, $750 price target
Rosenblatt: Maintained Buy rating, $811 price target
Wedbush: Maintained Outperform rating, raised price target from $680 to $700
Cantor Fitzgerald: Reiterated Overweight rating, lowered price target from $730 to $720
Raymond James: Maintained Strong Buy rating, raised price target from $675 to $725

Key Items to Watch: There are many topics that investors and analysts will likely be drawn towards in Meta's earnings report and conference call.

Politics could be a big one with Meta's recent announcement that it was shifting away from content moderation to a "community notes" style used by X. Meta CEO Mark Zuckerberg also attended Donald Trump's inauguration and the company donated to the inauguration fund.

Reports of some accounts getting suspended over content and people being forced to follow Trump and J.D. Vance could be among the topics and questions. Investors and analysts will also want to see that the company didn't lose users in the fourth quarter due to politics.

The pending ban of TikTok could be another topic with reports that Meta is trying to lure away TikTok content creators to Facebook and Instagram. The ban could be good for Meta and the company will likely be questioned on how it could benefit and whether it considered trying to buy the platform or partner on a purchase.

Capex could be another item to watch with some quarters seeing Meta raise its full-year guidance for spending and spooking investors.

Zuckerberg recently said that Meta will dedicate $60 billion to $65 billion in capital spending on the company's AI efforts including a new data center. Investors will likely not want to see spending guidance too high.

Comments on layoffs could also be a topic to watch and fits into the capex with buyouts and other costs associated with lowering the headcount.

META Price Action: Meta stock is up 2.53% to $676.60 on Tuesday at publication. Shares hit a new 52-week high of $680.95 earlier Tuesday. The stock is up 69% over the last year.

Read Next: