Analysts expect strong digital ad growth and a low valuation to lift META stock post-earnings amid investor skepticism over spending.
Meta Platforms (META) reports second-quarter earnings after market close on July 29, following a nine-session losing streak. Investor concerns over capital expenditures and losses in its Reality Labs division have weighed on the stock, mirroring Alphabet’s (GOOG, GOOGL) recent decline after reporting negative free cash flow.
The company’s core digital advertising business, which drives nearly all revenue, grew 33% in Q1. Industry data shows paid social ad spend rose 26% in Q2, with Meta gaining market share against Google. Analysts anticipate another quarter of robust ad revenue growth, potentially surpassing Google Search.
META currently trades at a price-to-earnings ratio of 19, below its historical valuation. The stock’s recent pullback has amplified expectations for a post-earnings rebound, supported by strong ad demand and a discounted multiple.