TLDR:
- Meta stock has dropped over 18% this year due to ad spending concerns amid recession fears
- Benchmark analyst lowered price target to $640 from $820 but maintained Buy rating
- Stifel reduced price target to $628 from $740 while keeping Buy recommendation
- Wall Street maintains Strong Buy consensus with average price target of $705
- Meta’s Q1 earnings report scheduled for April 30 with expected EPS of $5.24 and revenue of $41.3 billion
Meta Platforms is set to announce its first-quarter results on April 30 amid a challenging year for the social media giant. META stock has taken a significant hit in 2025, plunging more than 18% year-to-date as investors worry about declining ad spending in a potentially recessionary environment triggered by tariff wars.
Despite this downward trend, most Wall Street analysts remain bullish on Meta’s long-term prospects. However, several have adjusted their expectations ahead of the upcoming earnings report.
On Wednesday, Benchmark analyst Mark Zgutowicz cut his price target for META stock to $640 from $820. He kept his Buy rating intact while expressing caution about the company’s near-term outlook, citing a weakening global demand backdrop.
Zgutowicz isn’t alone in tempering expectations. Stifel analyst Mark Kelley also lowered his price target to $628 from $740, though he too maintained a Buy recommendation on the stock.
Macroeconomic Headwinds
The primary concerns weighing on Meta stem from broader economic uncertainties. Analysts worry that consumers facing higher prices may spend less, impacting e-commerce and marketplace growth.
Stifel’s Kelley noted his discomfort with forward estimates, stating, “Can’t remember a time outside of COVID where we’ve felt this level of discomfort with our forward estimates.”
Regulatory challenges have added to Meta’s troubles. The European Union has imposed hefty fines on Meta for violating its Digital Markets Act, creating additional pressure on the company.
The Federal Trade Commission’s antitrust trial against Meta has also commenced, focusing on the company’s acquisitions of Instagram and WhatsApp. This legal scrutiny represents yet another hurdle for the social media giant.
Earnings Expectations
Despite near-term caution, Monness analyst Brian White expects Meta’s Q1 revenue to meet his forecast of $41.73 billion with earnings per share hitting $5.54. This would represent a year-over-year revenue growth of 14%, which marks a slowdown from 21% in Q4 2024 and 27% in Q1 2024.
Wall Street consensus anticipates Meta reporting Q1 earnings per share of $5.24, reflecting a year-over-year growth of over 11%. Analysts expect Q1 revenue to rise 13% to $41.3 billion.
It’s worth noting that Meta has exceeded analysts’ earnings consensus for eight consecutive quarters, building a track record of outperformance even amid challenges.
Analyst Consensus
The overall sentiment on Wall Street remains strongly positive. Meta stock currently has 42 Buy ratings, three Hold ratings, and just one Sell recommendation, resulting in a Strong Buy consensus.
The average price target stands at $705, suggesting a potential upside of 35.5% from current levels. Even with reduced targets from several analysts, the long-term outlook appears optimistic.
Benchmark analysts pointed out that Meta stock is currently trading at 1.03 times the forward price-to-earnings ratio of the S&P 500, which sits at the lower end of its twelve-month range. This valuation metric suggests the stock may be reasonably priced despite ongoing concerns.
In their reduced target justification, analysts cited several factors they’re monitoring closely, including impacts from reduced advertising by China-based companies, effects of a weakening U.S. dollar on demand, and long-term capital expenditure and dividend policies in the current demand environment.
Meta’s retail media strategy performance will also be a key focus during the upcoming earnings call, potentially providing insights into new revenue streams.
The company’s fundamentals remain strong according to market data, with 21.94% revenue growth and industry-leading gross margins of 81.68%. These metrics suggest Meta maintains powerful underlying business performance despite external pressures.
While short-term headwinds exist, many analysts believe Meta is well-positioned to benefit from digital advertising trends over the long term. The company continues to expand its platform reach and innovate with generative AI technologies.
Meta’s Q1 earnings report, scheduled for April 30 after market close, will provide crucial insights into how the company is navigating current challenges and positioning itself for future growth.
