Meta Stock Slides But RBC, Wolfe, and Arete Still See Upside – Here’s Why

TLDR

• Royal Bank of Canada reaffirmed its Outperform rating on META with an $810 price target, implying about 30% upside.
• META was trading down 1.6% at $622.58, with a 12-month range of $520.26 to $796.25.
• Q1 2025 earnings beat estimates with EPS of $10.44 versus $6.67 expected, and revenue of $56.31 billion, up 33.1% year over year.
• Arete upgraded META to Buy with a $735 price target, citing flexible cost structure, subscription growth, and AI progress.
• Wolfe Research maintained its Outperform rating with an $800 target, forecasting 22% revenue growth in 2027 versus Wall Street’s 19% estimate.

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Meta Platforms $622.58 at the time of writing was under some pressure Monday, falling 1.6%, but that hasn’t rattled Wall Street’s long-term outlook for the stock.

Meta Platforms, Inc., META

Royal Bank of Canada reaffirmed its Outperform rating on META and held its $810 price target. That implies roughly 30% upside from where the stock was trading.

The broader analyst picture looks supportive too. MarketBeat data shows a Moderate Buy consensus with an average price target of $840.19. Four analysts have a Strong Buy rating, 34 have Buy, and nine have Hold.

Arete was one of the more notable moves on the analyst front Monday. Analyst Rocco Strauss upgraded META from Neutral to Buy, raising his price target from $614 to $735. He pointed to META’s flexible cost base, subscription growth, and internal AI progress.

Strauss believes META could evolve into what he called a “neocloud with excess compute” — a company generating revenue by selling or deploying spare AI compute capacity. It’s an interesting framing for a social media giant.

Q1 Earnings Blew Past Estimates

The analyst enthusiasm has some fundamental backing. META’s most recent quarter, reported April 29, was a strong one. The company posted EPS of $10.44 against a consensus estimate of $6.67 — a beat of $3.77 per share. Revenue came in at $56.31 billion, up 33.1% year over year, and slightly ahead of the $55.56 billion expectation.

Return on equity stood at 36.93% and net margin at 32.84%. Analysts currently expect full-year EPS of $29.35.

The stock’s 50-day moving average is $617.84, and its 200-day sits at $636.92, so Monday’s trading price of $622.58 is roughly in line with recent trend levels.

Wolfe Sees Room to Run

Wolfe Research maintained its Outperform rating on May 21 with an $800 target. The firm noted META trades at around 16 times its estimated 2027 earnings, which it considers a discount for a company of META’s quality.

Wolfe forecast 2027 revenue growth of 22% year over year, ahead of the Street’s 19% estimate. That said, Wolfe flagged real investor concerns: questions around peak growth, limited near-term catalysts, negative free cash flow, and annual capex of around $145 billion.

Not every firm is as upbeat. Cantor Fitzgerald cut its target from $850 to $750 in late April, while Wall Street Zen downgraded to Hold in mid-May. Tigress Financial, on the other end, raised its target to $945 and gives META a Strong Buy.

On the insider front, CFO Susan Li sold around 9,195 shares in May at $607.84 each, as part of a pre-arranged 10b5-1 plan tied to tax obligations. COO Javier Olivan sold 2,778 shares in April. Insiders have collectively sold about 40,890 shares worth roughly $25.3 million over the past 90 days.

Institutional ownership stands at 79.91%. Vanguard holds nearly 200 million shares, and State Street lifted its position by 5.1% in Q4.

META carries a market cap of $1.57 trillion, a P/E of 22.93, and a beta of 1.23.