Meta Platforms Rises 23% Year to Date: Should You Buy the Stock?

Meta Platforms’ META shares have appreciated 22.5% year to date (YTD), outperforming the broader Zacks Computer & Technology sector, as well as its advertising peers, including Amazon AMZN and Snap SNAP. However, META shares lag Alphabet GOOGL over the same time frame. Meta Platforms, Alphabet and Amazon are expected to absorb roughly 50% of the projected global ad spending by 2028.

Shares of Alphabet have increased 32.6% on a YTD basis. However, Amazon and Snap shares have dropped 1.8% and 26.6%, respectively. The broader sector appreciated 21.6% over the same time frame.

META Stock’s YTD Performance

META’s focus on integrating AI into its platforms — Facebook, WhatsApp, Instagram, Messenger and Threads — is driving user engagement to boost ad revenues. AI is heavily dependent on data, of which META has a trove, driven by its more than 3.48 billion daily users.

META shares are trading above the 200-day moving averages, indicating a bullish trend.

META Shares Trade Above 200-Day SMA

Let’s find out why Meta Platforms’ shares are a buy right now.

New Tools to Drive Up META’s Prospects

META is frequently introducing new features across its platforms to drive more conversation and user engagement. The company is using Meta AI (currently used by more than one billion people) to boost user experience.

Threads users can now attach up to 10,000 characters of text to a post and any text so attached can be read directly in the app. In July, the company added a feature that allows users (ages 18 and older) to send DMs (between Threads followers or mutual followers from Instagram) directly in the app. META also introduced the Threads highlighter, which brings to focus the trending topics. The company recently introduced communities on Threads. 

For Instagram, META has launched several new features and tools like repost, interactive map and Friends tab in Reels. The repost option helps Instagram users share reels and posts, which will appear in friends’ feeds and a dedicated repost tab on profiles. The interactive map allows friends to share locations and explore posts, reels and stories tagged to places. The Friends tab in Reels makes it easy to see what content friends are enjoying.

Meta Platforms launched a feature in July that streamlined all marketing campaigns across WhatsApp, Facebook and Instagram in one centralized place, Ads Manager. Moreover, META is creating ways for businesses and creators to grow their presence in the WhatsApp Updates tab, which is currently used by 1.5 billion people daily.

New Safety Features Aid META’s User Engagement

Apart from new tools and features, Meta Platforms has been focusing on improving security across its platforms. META has introduced features and new anti-scam tools in WhatsApp to combat scammers. For Facebook, the company launched passkeys on Facebook for mobile devices, which now allows users to verify their identity and log in to their account more securely compared with traditional passwords. 

The introduction of Teen Accounts has been a key catalyst in boosting security on Instagram. META has expanded Teen Accounts to Facebook and Messenger platforms. The company recently announced that Instagram Teen Accounts will be guided by PG-13 movie ratings by default.

META’s 2025 Earnings Estimate Revision Trend is Positive

The Zacks Consensus Estimate for 2025 earnings is pegged at $28.15 per share, up by a couple of cents over the past 30 days, suggesting 18% growth from the figure reported in 2024. 
 

Meta Platforms, Inc. Price and Consensus

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

The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at $6.72 per share, unchanged over the past 30 days, suggesting 11.4% growth from the figure reported in the year-ago quarter. The consensus mark for fourth-quarter 2025 earnings inched up by a penny to $8.10 per share, indicating 1% growth from the figure reported in the year-ago quarter.

META Shares Trade at a Premium

META shares are overvalued, as suggested by the Value Score of C. In terms of the forward 12-month price/sales (P/S), META is trading at 8.71X, a premium compared with the broader sector’s 6.73X, Amazon’s 3.27X, Alphabet’s 7.84X, and Snap’s 1.95X.

P/S Ratio (F12M)

Here’s Why You Should Buy META Stock Right Now

Meta Platforms is spending heavily on expanding AI infrastructure, which is expected to drive top-line growth. This, along with the company’s heavy usage of AI, is expected to boost user engagement. These factors justify Meta Platforms’ premium valuation.

META currently has a Zacks Rank #2 (Buy) and has a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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