Meta Platforms' Q2 Earnings: A Closer Look at the Valuation of META Stock.

Meta Platforms' Q2 earnings report exceeded expectations, with a 22% YoY revenue increase to $47.5 billion. FOMO trading has pushed META stock up 12% to $780.56, and options volume has surged, with over 8,100 put option contracts trading at the $770 strike price expiring tomorrow. Investors are selling short these puts, receiving a 0.649% yield in one day, and a monthly expected return of 2.60%. However, the stock's value is uncertain, with some analysts suggesting it could be worth $854.19 based on free cash flow and margins.

Meta Platforms, Inc. (META) reported its second-quarter 2025 financial results, which exceeded market expectations. The company's revenue surged by 22% year-over-year (YoY) to $47.5 billion, while operating income increased by 38% to $20.44 billion [1].

The strong performance was driven by robust user engagement and advertising growth. The company's family daily active people (DAP) reached 3.48 billion, an increase of 6% YoY, while ad impressions grew by 11% YoY. The average price per ad also increased by 9% YoY, contributing to the revenue growth [1].

The stock price responded positively to the earnings report, with META shares rising by 12% to $780.56. The surge in stock price was accompanied by increased trading activity, with over 8,100 put option contracts trading at the $770 strike price expiring tomorrow. Investors are selling short these puts, receiving a 0.649% yield in one day and a monthly expected return of 2.60% [1].

However, the stock's value remains uncertain. Some analysts suggest that the stock could be worth $854.19 based on free cash flow and margins. The company expects third-quarter 2025 total revenue to be in the range of $47.5-50.5 billion, with a year-over-year growth rate of 20-24% for total expenses [1].

The company also expects a reduction in its U.S. federal cash tax for the remainder of the current year and future years due to the enactment of the new U.S. tax law. However, the magnitude of the reduction is yet to be quantified [1].

References:
[1] https://investor.atmeta.com/investor-news/press-release-details/2025/Meta-Reports-Second-Quarter-2025-Results/default.aspx