Meta Platforms trades roughly 31.84% below Wall Street's average price target after a Q2 2026 earnings report that missed on profit and free cash flow. Analysts have barely flinched: 55 of 62 covering the stock still rate it a Buy, with some targets reaching past $1,000.
Meta Platforms dropped as much as 11.7% in the first hour of trading after its Q2 2026 earnings landed on July 29. The stock now sits at $587.94, roughly 31.84% below Wall Street's average 12-month price target of $768.58. Even so, 55 of 62 covering analysts still rate it a Buy, with top targets reaching past $1,000.
An AI spending bill hits the profit line
Diluted EPS came in at $6.18 against a $7.2173 consensus — a 14.42% miss that broke a six-quarter beat streak. Revenue still beat expectations, rising to $60.80 billion versus $60.29 billion expected, but costs overshadowed the top line. Total expenses jumped 55% to $42.03 billion, weighed down by $2.40 billion in legal charges and $1.18 billion in severance tied to an 8,000-employee headcount reduction. As a result, operating margin compressed to 31% from 43% a year earlier. Free cash flow collapsed to $784 million from $8.55 billion, a 91.31% decline, even as capex nearly doubled. Meta guided full-year 2026 capex to $130 billion to $145 billion to fund its AI buildout.
Analysts still lean on the ad business
The bull case rests on advertising. Ad revenue grew 27% year over year to $59.36 billion, with impressions up 14% and price per ad up 12%. Rosenblatt's Barton Crockett sets a target between $1,015 and $1,117, pointing to Llama ecosystem monetization and AI-driven ad personalization, while Jefferies' Brent Thill sits at $825 to $910+ and Tigress Financial models $945. According to CEO Mark Zuckerberg: "AI is accelerating our core business today".
Alphabet compounds, Snap lags behind
Alphabet shows a steadier profile: its consensus target sits at $426.95, with 13 Strong Buy, 45 Buy, 6 Hold and 0 Sell ratings across 64 analysts. Its revenue grew 24.2% year over year last quarter. Snap tells a different story. Its analyst target of $7.23 sits well above a 50-day moving average near $5.00, and ratings skew weaker at 3 Strong Buy, 7 Buy, 29 Hold, 1 Sell and 2 Strong Sell. The company remains unprofitable, with an operating margin of -4.87%.
Meta is down 10.78% year to date and 24.03% over the past year, a stretch in which the S&P 500 traded higher. Forward earnings multiples sit near 19, below the trailing 22. That leaves free cash flow of $784 million as a thin cushion against a $130 billion to $145 billion capex bill.
Source: 24/7 Wall St. (via Yahoo Finance)
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