Meta Platforms Analyst Expects 'Strong Momentum' In Q4 To Continue In 2025

Meta Platforms Inc. META is scheduled to release fourth-quarter earnings on Jan. 29. Ahead of the earnings report, Goldman Sachs shared its views on Meta’s earnings potential. Here’s what you need to know.

The Details: Goldman Sachs analyst Eric Sheridan maintained a Buy rating on Meta and raised the 12-month price target from $630 to $688 to reflect higher revenue estimates on the back of positive channel checks.

The Goldman analyst highlighted the possibility for Meta to achieve compounded mid-teens revenue growth in the fourth quarter and sustain that momentum into 2025.

In the note, Sheridan pointed to several advertising opportunities to support his outlook, including the potential for Meta to boost advertising revenue by increasing ad load on Reels. The Goldman analyst also believes that Meta has yet to fully utilize WhatsApp and Messenger for ad revenue.

Sheridan noted that Meta has significant untapped potential in areas such as click-to-message ads and paid messaging. The analyst also acknowledged the possibility of advertising dollars being redistributed to platforms like Meta if the Protecting Americans from Foreign Adversary Controlled Applications Act is upheld and TikTok is banned in the U.S.

“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 in the note.

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Additionally, the analyst sees upside potential for Meta from several long-term AI revenue opportunities, including sponsored search results within Meta AI conversations and licensing its Llama AI models for enterprise use. However, Sheridan noted that these products are early in their lifecycles, and better visibility into their development and adoption is needed before factoring them into forecasts as material revenue drivers.

“We see a path to Meta delivering toward the top end of its revenue guidance range for Q4'24 and sustained ~mid-teens % total revenue growth through 2025,” the Goldman analyst said.

Meta is due to report earnings after the market close on Jan. 29. Analysts expect the company to report earnings of $6.77 per share and revenue of about $47 billion, according to estimates from Benzinga Pro.

META Price Action: Meta shares closed Tuesday down 2.31% at $594.25, according to data from Benzinga Pro.

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