META Stock Is Near All-Time Highs

Meta Platforms (META) stock has surged over 60% this year, reaching a record high of $576 per share on Wednesday. Naturally, investors are now curious whether the stock has room for further growth.

To assess the potential for another upward move, let's explore the key factors driving Meta's stock rally and evaluate whether more upside remains for META at its current levels.

META Stock: Strong Financial Performance

As shown in the EPS surprise chart above, Meta has exceeded the Zacks EPS Consensus for seven straight quarters, delivering an average earnings surprise of 12.61% across its last four quarterly reports.

Pointing to the company’s increased probability, Meta most recently reported Q2 EPS of $5.16 in July which beat estimates by 10% and soared 60% from $3.23 per share in the comparative quarter.

META Earns Positive Analyst Ratings

Meta's strong financial performance has fueled optimism among analysts, further driving its stock higher. Of the 45 brokers covering Meta and reporting to Zacks Investment Research, 39 have issued a strong buy rating.

Meta currently holds an average brokerage recommendation (ABR) of 1.33 on a scale from 1 (Strong Buy) to 5 (Strong Sell), reflecting continued confidence in the company’s outlook.

META's Innovation and Product Expansion

Analysts remain optimistic about Meta’s prospects in artificial intelligence, reinforcing the positive sentiment around the stock. At its annual conference today, CEO Mark Zuckerberg announced that Meta AI is now one of the most widely used AI assistants globally, with nearly 500 million monthly users.

The "Meta Connect 2024" event featured significant updates to Meta AI, including the introduction of natural voice interactions beyond text. These AI voice features are now available across all major Meta apps—Instagram, WhatsApp, Messenger, and Facebook—and will compete with Alphabet's Google Gemini Live and OpenAI’s Advanced Voice Mode.

Meta is also expanding its business AI solutions to help companies enhance customer service, provide support, and facilitate commerce. Additionally, Meta introduced updated versions of its Quest 3S VR headset and offered a preview of its Orion augmented reality glasses. The company claims these AR glasses are the most advanced ever made, blending the style of regular eyewear with immersive augmented reality features.

Tracking META's Stock Valuation

One key factor behind Meta's stock surge is its appealing valuation compared to other major tech companies. META currently trades at 26.3 times forward earnings, only slightly higher than the S&P 500's multiple of 24.2 times.

Additionally, META remains well below its decade-high valuation of 74.5 times forward earnings, though it trades slightly above its 10-year median of 25 times. This suggests that the stock still offers value relative to its historical range.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.