Meta Platforms Industry Comparison: Financial Metrics, Market Position, and Growth Prospects.

Meta Platforms is the largest social media company with a market value of over $800 billion. Its key financial metrics include a P/E ratio of 27.94, P/B ratio of 9.71, and P/S ratio of 10.93. The company has a ROE of 9.05% and EBITDA of $22.52 billion. Meta is investing heavily in its Reality Labs business, which remains a small part of its overall sales.

Meta Platforms, the parent company of Facebook, Instagram, WhatsApp, and Messenger, is set to report its second-quarter 2025 earnings on July 30. The company has seen a robust growth trajectory, with its stock outperforming the broader sector and industry. Here's a detailed look at the key financial metrics and expectations for the upcoming earnings report.

Revenue and Earnings Estimates

Meta Platforms expects total revenues between $42.5 billion and $45.5 billion for the second quarter of 2025, according to the company's latest guidance. The Zacks Consensus Estimate for second-quarter revenues is pegged at $44.84 billion, indicating a 14.77% increase from the year-ago quarter’s reported figure [1]. The consensus mark for earnings stands at $5.83 per share, up 1.7% over the past 30 days, suggesting growth of 12.98% from the figure reported in the year-ago quarter.

Advertising Revenue Growth

Meta Platforms’ advertising revenues are expected to benefit from strong spending by advertisers, leveraging its growing AI prowess despite tariff-related uncertainties. The Zacks Consensus Estimate for second-quarter 2025 advertising revenues is currently pegged at $43.94 billion, suggesting 14.6% year-over-year growth. Meta’s offerings—WhatsApp, Instagram, Messenger, and Facebook—currently reach more than three billion people daily, making it a significant player in the digital ad sales market [1].

Operating Income and Reality Labs

The Zacks Consensus Estimate for Family of Apps’ operating income is pegged at $22.38 billion, indicating 15.7% year-over-year growth. However, the Reality Labs business continues to burn cash, with the consensus mark for Reality Labs’ loss pegged at $5.35 billion, wider than the year-ago quarter’s loss of $4.49 billion [1].

Valuation and Performance

Meta Platforms shares have jumped 22.3% year to date, outperforming the Zacks Computer & Technology sector’s appreciation of 10.1% and the Zacks Internet Software Industry’s return of 17.9%. The company’s stock is not cheap, with the Value Score of D suggesting a stretched valuation. In terms of the forward 12-month Price/Sales, Meta Platforms is trading at 8.96X, higher than the broader sector’s 6.7X [1].

AI and Long-Term Strategy

Meta Platforms is heavily investing in AI, leveraging its vast user base of more than 3.43 billion daily users. The company has been using AI to improve the potency of its platform offerings, including WhatsApp, Instagram, Messenger, and Facebook. Meta’s growing footprint among young adults and its AI-driven feed recommendations have boosted its competitive prowess. The company’s AI execution is its most compelling strength, with the Prometheus supercluster and Hyperion data center powering its AI models [2].

Investment Implications

Meta Platforms currently has a Zacks Rank #2 (Buy) and a Growth Score of A, a favorable combination that offers a strong investment opportunity [1]. The company’s stock is neither a screaming buy nor a sell, trading at a discount to NVIDIA and Microsoft but a premium to undervalued peers like Alphabet. The key question is whether its AI investments will yield returns before rivals.

References

[1] https://www.tradingview.com/news/zacks:16b69b1a0094b:0-should-meta-platforms-stock-be-in-your-portfolio-pre-q2-earnings/
[2] https://www.ainvest.com/news/meta-platforms-meta-ai-stock-buy-dip-deep-dive-valuation-ai-execution-long-term-moat-building-2507/