The competition authority in France has raised serious concerns about Meta (META, Financial) and its practices in the online advertising market. Specifically, the company is accused of leveraging its dominant market position to unfairly restrict access to ad verification partnerships. This conduct allegedly lacks transparency, objectivity, and fairness, potentially impacting related markets that provide ad verification services and ad spaces.
The situation emerged after a complaint was filed by Adloox in October 2022, prompting interim measures on May 4, 2023. The authority has mandated Meta to establish and disclose new criteria for its “viewability” and “brand safety” partnerships. These criteria must be clear, equitable, and proportionate, and are aimed at facilitating Adloox's involvement in these key partnerships.
This development marks the beginning of a formal investigation process, allowing Meta to present its defense against these allegations. The findings from this inquiry, including written observations and oral hearings, will ultimately determine whether Meta's practices are indeed in violation of competitive regulations. Until the investigation concludes, the interim measures set forth by the authority will remain in effect.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 61 analysts, the average target price for Meta Platforms Inc (META, Financial) is $731.07 with a high estimate of $935.00 and a low estimate of $525.00. The average target implies an downside of 0.53% from the current price of $735.00. More detailed estimate data can be found on the Meta Platforms Inc (META) Forecast page.
Based on the consensus recommendation from 71 brokerage firms, Meta Platforms Inc's (META, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Meta Platforms Inc (META, Financial) in one year is $544.27, suggesting a downside of 25.95% from the current price of $734.9976. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Meta Platforms Inc (META) Summary page.
META Key Business Developments
Release Date: April 30, 2025
- Total Revenue: $42.3 billion, up 16% year-over-year.
- Total Expenses: $24.8 billion, up 9% year-over-year.
- Operating Income: $17.6 billion, representing a 41% operating margin.
- Free Cash Flow: $10.3 billion.
- Cash and Marketable Securities: $70.2 billion.
- Debt: $28.8 billion.
- Family of Apps Revenue: $41.9 billion, up 16% year-over-year.
- Family of Apps Ad Revenue: $41.4 billion, up 16% year-over-year.
- Reality Labs Revenue: $412 million, down 6% year-over-year.
- Reality Labs Operating Loss: $4.2 billion.
- Capital Expenditures: $13.7 billion, driven by investments in servers, data centers, and network infrastructure.
- Employee Headcount: Over 76,800 employees, up 4% quarter-over-quarter.
- Q2 2025 Revenue Guidance: $42.5 billion to $45.5 billion.
- Full Year 2025 Expense Guidance: $113 billion to $118 billion.
- Full Year 2025 CapEx Guidance: $64 billion to $72 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Meta Platforms Inc (META, Financial) reported a strong start to the year with a 16% increase in total revenue, reaching $42.3 billion.
- The company has seen significant growth in user engagement, with improvements to recommendation systems leading to increased time spent on Facebook, Instagram, and Threads.
- Meta AI has nearly 1 billion monthly active users, with strong engagement particularly on WhatsApp and Facebook.
- The company is making strides in AI-driven advertising, with new models increasing conversion rates and more advertisers using AI creative tools.
- Meta Platforms Inc (META) is expanding its AI and hardware capabilities, with Ray-Ban Meta AI glasses tripling in sales and new launches planned with Essilor Luxottica.
Negative Points
- Reality Labs continues to operate at a loss, with a $4.2 billion operating loss reported for the quarter.
- The company faces regulatory challenges in the EU, which could impact its business model and revenue in the region.
- Increased infrastructure and hardware costs have led to a higher capital expenditure outlook for 2025, impacting financial flexibility.
- There is uncertainty in the macroeconomic environment, including potential impacts from changes in e-commerce regulations affecting advertiser spend.
- Meta Platforms Inc (META) is experiencing capacity constraints in AI infrastructure, which could delay some product developments and testing.
