Meta’s ad inventory remains in high demand, with average ad pricing up by 10% year-over-year.
Meta achieved a 22% increase in revenue due to higher ad pricing.
Meta raised its capital spending forecast to $37-$40 billion and plans significant investment growth for 2025.
The ad business continues to be highly profitable with free cash flow up nearly 20% to $13.2 billion.
The fair value estimate for Meta’s stock has increased to $450 per share, reflecting strong ad revenue growth.
Ad revenue is expected to grow by 18% in 2024 and 15% in 2025, driven by online ads and Reels monetization.
Meta’s monthly active users are projected to grow by 2% annually, mainly from Asia and other regions.
Meta has a wide economic moat due to its strong network effects and extensive user data.
Meta has a robust balance sheet with $47 billion in net cash and a 41% increase in cash from operations.
Meta faces high uncertainty from potential disruptions in social media trends and regulatory risks affecting data privacy and usage.