Meta set to report Q1 earnings as ad-pricing headwinds test growth outlook

Meta Platforms (META) is scheduled to report its fiscal first-quarter earnings after the market closes on April 30. The social media giant heads into the results under pressure to maintain its growth trajectory amid emerging ad-pricing challenges and a softening macroeconomic environment.
By Kyle Rodda

Earnings expectations: solid top-line growth, margin pressures in focus

According to Bloomberg consensus estimates, Meta is expected to deliver adjusted net income of $13.79 billion for the quarter, down from $15.73 billion in the prior quarter. Adjusted earnings per share (EPS) are forecast at $5.23, reflecting a year-on-year increase of 12.5%. Revenue is projected at $41.81 billion, up 13.5% from the same period a year earlier, driven by continued strength in digital advertising demand and monetisation of Reels and messaging platforms. However, adjusted EBITDA is forecast to decline by approximately 8.35% sequentially, reflecting ongoing investments in AI infrastructure and Reality Labs, along with pricing pressures in the advertising market.

Ad-pricing trends and AI initiatives key to outlook

Investors will be closely monitoring Meta’s commentary on advertising trends, particularly in light of softening ad-pricing dynamics amid trade tensions with China. Large Chinese advertisers such as Temu and Shein have reportedly pulled back spending, weighing on overall ad growth. At the same time, Meta’s pivot toward AI-driven ad tools and increased monetisation of newer formats like Reels are expected to underpin long-term revenue growth. Management’s guidance around AI monetisation, cost discipline, and user engagement across its platforms will be crucial for investor sentiment going forward.

Analysts remain bullish on Meta’s outlook, stock trades at discount

Wall Street remains largely bullish on Meta heading into earnings. According to Bloomberg data, 88.6% of analysts rate the stock a buy, with an average 12-month price target of $713.60, implying a potential upside of 30.4% from current levels.

Meta shares bounce but uptrend breaks down

The correction in US tech stocks following the ratcheting up of US tariffs has seen a breaking down of Meta’s primary uptrend. The stock’s technicals point to a slowdown in downside momentum but it remains in a downward trend channel. A breakout would signal a possible renewed move to the upside for Meta shares, with previous upward sloping trendline support a critical level of future resistance. A failure to break-out of the trend channel and a re-test and break of recent lower-lows around $480 would signal further bearishness.

(Source: Trading View)
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