Meta Stock Seems to Be Bouncing Back. Is the Growth Stock Now Too Cheap to Ignore? | The Motley Fool

"While investors shouldn't read too much into the analyst's commentary, I do agree that shares may have simply become too cheap to ignore. Remember: We're talking about a company with robust profits, rapid revenue growth, tons of cash, and huge growth opportunities. Yet shares trade at a price-to-earnings ratio in the twenties. So, what's the holdup? Wall Street is bracing itself for Meta's massive investment cycle."

"In the third quarter of 2025, Meta's revenue grew 26% year over year to $51.2 billion. Highlighting Meta's momentum, this was a significant acceleration from 16% and 22% in the first and second quarters of 2025, respectively. The business still runs overwhelmingly through advertising, with about 98% of total revenue during the period coming from advertising revenue. Fueling Q3, Meta's ad impressions across its social media apps rose 14% year over year, and the average price per ad increased 10%."

"Additionally, profitability was robust in absolute terms, with Meta's operating income for the quarter coming in at $20.5 billion. But it notably climbed much more slowly than revenue, rising just 18%. To this end, the cost line is the part that the market has been questioning. Meta's costs and expenses climbed 32% year over year in the third quarter, and operating margin fell to 40% from 43% a year earlier."

Shares of Meta Platforms rose about 6% after an analyst reiterated a buy rating and a $910 price target, implying more than 40% upside from a roughly $648 share price. Meta's revenue grew 26% year over year to $51.2 billion in Q3 2025, accelerating from prior quarters. Advertising generated about 98% of revenue, with ad impressions up 14%, average price per ad up 10%, and daily active users up 8% to over 3.5 billion. Operating income was $20.5 billion, up 18%, while costs rose 32%, pushing operating margin down to 40%. Capital expenditures reached $19.4 billion, creating free-cash-flow pressure amid a large investment cycle. Shares trade at a price-to-earnings ratio in the twenties despite strong growth and profits.

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