Meta Stock: Jefferies Calls Recent Pullback a Buying Opportunity Before Q4 Earnings

TLDR

• Jefferies analyst Brent Thill reiterated a Buy rating on Meta Platforms with a $910 price target ahead of Q4 earnings on January 28
• META stock has pulled back 18% since Q3 earnings, creating what Jefferies calls an attractive buying opportunity at current valuations
• Wall Street expects Q4 earnings per share of $8.19 and revenue of $58.35 billion, representing 20.6% year-over-year growth
• HSBC maintains its Buy rating with a $905 price target, citing Meta’s AI investments driving advertising business growth
• Analysts predict WhatsApp revenue could grow from $9 billion to $36 billion by fiscal 2029, with additional upside from Threads and Llama AI

Meta Platforms is set to report fourth-quarter results on January 28. The social media company’s stock has experienced an 18% decline since its third-quarter earnings report.

Meta Platforms, Inc., META

Jefferies analyst Brent Thill sees this as a chance for investors. He reiterated a Buy rating with a $910 price target.

The stock climbed 6% on Thursday as Jefferies named META a Top Pick. Broader market strength also helped the rally.

Wall Street analysts expect the company to post earnings per share of $8.19. That represents 2.1% growth from the same period last year.

Revenue estimates sit at $58.35 billion, up 20.6% year-over-year. The consensus suggests healthy growth continues for the tech giant.

Thill points to five key factors supporting his bullish stance. First, META shares now trade at an attractive valuation following the recent selloff.

The stock trades at an “8-turn PE discount” compared to Alphabet. This represents a meaningful gap between the two companies.

Second, Thill sees limited downside risk to current estimates. Revenue strength and efficiency gains should offset higher operating expenses.

AI Investments Drive Growth Outlook

The analyst highlighted Meta’s “all-star AI hires” as a third reason for optimism. He expects these additions to deliver results in 2026.

AI continues to power Meta’s core advertising business. The technology improves ad targeting and increases user engagement on the platform.

HSBC also maintains a Buy rating with a $905 price target. The bank credits Meta’s early AI investments for supporting its advertising business.

AI drives higher usage and creates more ad space. Meta’s gross profit margins stand at an impressive 82.01%.

Revenue grew 21.27% over the last twelve months. The company shows strong operational performance despite market concerns.

Meta guided that capital expenditure growth will exceed the $32 billion increase expected in 2025. Market consensus anticipates $39.4 billion in capital expenditure growth for 2026.

Total expenses will grow faster in 2026 than in 2025. Analysts expect 23% expense growth in 2025 and 28% growth in 2026.

Revenue Diversification Gains Traction

Thill sees new growth engines emerging for Meta. WhatsApp currently generates about $9 billion in revenue.

The analyst projects WhatsApp revenue will reach $36 billion by fiscal 2029. That represents substantial growth potential from the messaging platform.

Threads and Llama AI offer additional upside opportunities. These products expand Meta’s revenue sources beyond traditional advertising.

The Wall Street consensus rating stands at Strong Buy. The rating comes from 37 Buy recommendations, six Holds, and one Sell.

The average price target of $820.21 suggests 24.5% upside potential. META currently trades at $647.63 with a P/E ratio of 28.56.

Analysts remain divided on concerns about margin pressures and high capital spending. Some worry about AI execution challenges going forward.

The TikTok sale to Oracle and Silverlake-led investors received approval from the U.S. and China. This deal could impact the competitive landscape for social media platforms.

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