META Enhances Teen Privacy Measures: Will It Drive Ad Revenue Growth?

Meta Platforms META is enhancing privacy features across its Family of Apps — Facebook, Instagram, Messenger, and WhatsApp. With daily active users reaching more than 3.43 billion in the first quarter of 2025, the social networking giant’s initiatives to build trust among users, particularly younger ones, are expected to drive traffic. This, in turn, is likely to provide a boost to advertising revenues, which contributed 98.8% to the Family of Apps revenues in the first quarter of 2025.

META has rolled out enhanced account protections for teen users, which include new safety notices, a combined block-and-report button, account join data visibility in personal chats and nudity protection by default. Meta Platforms is also extending these safeguards to adult-managed accounts featuring children, with stricter messaging settings and offensive comment filters.

With 135,000 harmful accounts and 500,000 linked accounts removed in early 2025, these steps aim to ensure a safer ecosystem for teenagers, resulting in stronger user confidence and more opportunities for advertisers through higher engagement.

Meta Platforms has expanded Teen Accounts across all its platforms, including Instagram in late 2024, and Facebook and Messenger in April 2025, with 97% of teens aged 13-15 opting to keep default protections enabled. 

META has also introduced passkey logins for Facebook, offering a secure, password-free login option that reassures teens and parents about account safety. By improving safety and privacy measures, Meta Platforms aims to retain young users and adults on its platforms, creating a secure environment that attracts premium advertisers and contributes to top-line growth.

Per our model, META’s second-quarter 2025 advertising revenues are expected to grow 12% year over year to $42.9 billion.

META Faces Tough Competition in Ad Space

Meta Platforms faces stiff competition from players like Amazon AMZN and Microsoft MSFT.

Amazon’s robust advertising business benefits from access to customer purchase data and shopping intent signals, enabling superior advertising opportunities for brands and sellers. The company’s ads business enjoys strong network effects, as more sellers compete for visibility, driving higher pricing. Amazon Ads recently introduced an AI-powered video generator to showcase advertisers' products by creating videos from static images, and launched Sponsored Ads in Ireland, creating new opportunities to further strengthen its advertising revenue stream.

Microsoft’s ads business is built on a mix of search, display and professional network ads powered by LinkedIn, delivering highly personalized ad experiences to users. LinkedIn Marketing Solutions remains the leader in B2B advertising. Microsoft Advertising recently launched Copilot-driven ad formats, including interactive Showroom Ads, AI-powered Dynamic filters, along with the Ads Studio, aimed at improving the performance of its advertising campaigns across platforms.

META’s Share Price Performance, Valuation and Estimates

Meta Platforms shares have appreciated 21.7% in the year-to-date period, outperforming both the broader Zacks Computer & Technology sector’s return of 10.9% and the Zacks Internet Software industry’s rise of 17.4%.

META’s YTD Price Performance

Meta Platforms' stock is trading at a premium, with a forward 12-month Price/Sales of 8.87X compared with the industry’s 5.82X. META has a Value Score of D.

META Valuation

The Zacks Consensus Estimate for 2025 earnings is pegged at $25.71 per share, up 1.6% over the past 30 days, indicating 7.75% year-over-year growth.

Meta Platforms, Inc. Price and Consensus

Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote

Meta Platforms currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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