Meta Stock Is Soaring After 2 to 1 Stock Split And Earnings: What You Must Know

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Meta Platforms Inc. (META) reported strong Q3 2026 earnings, with revenue up 28% year-over-year to $228.2 billion, driven by 23% revenue growth in the first year, decelerating to 12% by year five. Despite revenue growth, profit margins are shrinking, with net profit margin at 26.1% and gross margin at 81.4%. The company's return on invested capital remains strong at 20.5%. The stock's valuation ratios, including P/E and EV/EBITDA, are trading below the median historical and peer averages, indicating a potentially undervalued stock. The Altman Z-score of 9.12 suggests a low bankruptcy risk. The company's forward-looking estimates indicate significant revenue growth, with projected revenue reaching $507 billion in five years, leading to an estimated CAGR of 20.21%. The intrinsic value calculation, based on these assumptions and a projected P/E of 25, suggests a future stock price of $1,751, implying substantial upside potential. However, concerns regarding the increasing costs and expenses, particularly the litigation charge of $9.89 billion, and the decreasing profit margins require close monitoring.

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