Meta Platforms trades at 18x earnings as analysts see 43% upside

Meta Platforms trades at 18x forward earnings, its lowest multiple in three years, as Evercore ISI calls the stock a trough buy.

"Meta is the cleanest expression of our dislocated high-quality framework," Mark Mahaney, head of internet research at Evercore ISI, said on CNBC. "The market still treats Meta as a pure consumer ad name, but the AI subscription story is underappreciated."

The stock closed at $577.22, well off its 52-week high of $793.65. The sell-side consensus sits at $827.32, implying 43% upside, with 57 buy ratings and zero sells. Meta posted Q1 revenue of $56.31 billion, up 33% year over year, and EPS of $10.44 against a $6.66 consensus. Ad impressions rose 19% and average price per ad rose 12%.

The thesis hinges on capital expenditure peaking. Meta raised its 2026 capex guidance to as much as $145 billion, compressing near-term free cash flow. If Meta follows SpaceX's playbook and rents excess compute capacity, shares could re-rate quickly, Mahaney said. He noted that chips are lasting longer than expected, extending the useful life of existing infrastructure spend.

Meta's AI push is showing early traction. Muse Spark, the first model from Meta Superintelligence Labs, drove double-digit increases in AI sessions per user. Weekly business agent conversations grew to more than 10 million, up tenfold since the start of the year. Chief Executive Officer Mark Zuckerberg said the company is on track to deliver "personal superintelligence" to billions of users.

The stock has fallen 4.1% over the past month, trailing the S&P 500's 1.8% gain. Mahaney's internal model carries a one-year target near $816. The next catalyst is Meta's Q2 earnings report, where investors will watch for signs that capex intensity is peaking and free cash flow revisions are turning positive.

This article is for informational purposes only and does not constitute investment advice.