Meta Platforms Inc. (NASDAQ:META) has been facing a challenging trading environment recently, with shares falling notably during Thursday's market session. Over the preceding five trading days, the stock has declined by approximately 9.13%, which aligns with a broader pullback seen across major U.S. stock indices. The Nasdaq-100 index decreased by 1.32%, closing at 24,561 points, while the S&P 500 index dropped 1.04%, ending the day at 6,810 points.
This period of weakness contrasts with Meta’s notable post-earnings performance following its fourth-quarter financial results released on January 29, when the stock surged 9.24% to close at $730.50. At that time, Meta announced earnings per share (EPS) of $8.88, surpassing the consensus estimate of $8.16. Likewise, reported revenue stood at $59.89 billion, exceeding analysts’ expectations of $58.29 billion.
Despite the positive earnings surprise, recent commentary from analysts has reflected caution around the company's forward guidance. A note from JP Morgan analyst Doug Anmuth issued on Monday maintained an Overweight rating on Meta, with a price target of $825. However, the analyst highlighted concerns about Meta’s substantially increased expense forecast for 2026, which ranges between $162 billion and $169 billion. Capital expenditures are also projected to rise significantly, anticipated between $115 billion and $135 billion. Given these elevated costs, JP Morgan projects a modest free cash flow figure of only $5 billion in 2026.
Looking ahead, investors are preparing for Meta's subsequent earnings report scheduled for April 29, 2026. Expectations for that quarter include an EPS estimate of $6.62, an increase from $6.43 year-over-year, alongside a revenue estimate of $55.41 billion, up from $42.31 billion the prior year. The company’s valuation remains on the higher side, with a price-to-earnings (P/E) ratio of 28.5 times, indicating that the stock is trading at a premium relative to some peers in the technology and social media sector.
Market analysts maintain generally favorable views on Meta, underscored by a consensus Buy rating and an average price target of approximately $851.66. Recent analyst activity includes:
- Argus Research affirming its Buy rating while sustaining a $800 price target as of February 2,
- DA Davidson upgrading its price target to $850 and holding a Buy rating since January 29,
- Morgan Stanley upgrading its stance to Overweight with a price target of $825 announced on January 29.
Within the Benzinga Edge scorecard framework, Meta demonstrates certain strengths and vulnerabilities relative to the broader market. The company scores strongly on quality metrics, with a high score of 89.62 reflecting a robust balance sheet and financial stability. Conversely, Meta scores weakly in the value category, with a 44.55 score indicating its stock is trading at a significant premium compared to peers. Momentum is identified as bearish at 17.04, underlining recent underperformance relative to the wider market.
Meta’s stock price closed lower at $662.44 on Thursday, down roughly 0.98% for the day, as per Benzinga Pro data. This decline follows the broader stock market trends and reflects investor caution amid elevated expense projections and high capital spending plans outlined by the company.
In summary, despite Meta’s impressive recent earnings and generally positive analyst sentiment, the company is navigating a period of stock weakness influenced by sector-wide downturns and internal concerns regarding its future cost structure and cash flow generation. The upcoming earnings release will be closely scrutinized by market participants for further clarity on Meta’s financial trajectory and operational performance throughout 2026.