Benchmark Research has reiterated a Hold rating on Meta Platforms Inc. (NASDAQ: META), emphasizing that the company’s return on invested capital (ROIC) remains uncertain for the foreseeable future. Benchmark’s view comes amid what it describes as a sharply rising capital expenditure profile and growing operating expense pressure tied to AI-related spend.
At current market levels Meta is trading at a price-to-earnings ratio of 31.8 and a PEG ratio of 4.18. Data from InvestingPro cited by Benchmark indicates that Meta appears to be slightly overvalued relative to its Fair Value estimate.
The research firm characterized Meta’s capex trajectory as serving both defensive and offensive purposes as the social media company contends with "formidable tech stacks, comparable deep-pockets, and unknown future model economics." That elevated investment pace is a central factor in Benchmark’s caution.
Benchmark also drew attention to Meta’s recent first-quarter revenue guidance, which it said looked strong in spite of being assisted by roughly a 4% foreign exchange tailwind. Even so, the firm left its 2026 operating income estimate unchanged, citing steep operating expense increases that it projects at 41% year-over-year at the midpoint.
Notwithstanding these cost pressures, InvestingPro data shows Meta maintaining very high gross profit margins of 82% and an overall financial health score classified as "GREAT." Benchmark noted that compensation tied to AI initiatives continues to outweigh efficiencies from headcount reductions, and that dynamic is weighing on the company’s near-term financial outlook.
Looking further ahead, the research firm identified 2027 as a pivotal year for Meta’s owned and operated capacity, calling it a "pivotal proof year." At the same time, Benchmark warned that "MetaAI’s reasoning deficiencies should not be discounted," signaling concerns about the maturity and reliability of the company’s AI systems.
Other analyst activity following Meta’s latest financial reporting paints a more favorable short-term earnings picture. Cantor Fitzgerald reported that Meta’s fourth-quarter results beat estimates, with revenues and earnings per share above expectations by 3% and 8%, respectively. Piper Sandler said Q4 revenue and EBITDA exceeded forecasts by 2% and 4%, respectively.
Several firms updated price targets and ratings in the wake of the results. UBS raised its price target for Meta to $872, citing expected benefits from the company’s AI revenue strategies. Cantor Fitzgerald lifted its price target to $860 and retained an Overweight rating on the stock. Monness, Crespi, Hardt adjusted its price target to $890 while revising 2026 projections by increasing revenue estimates but lowering earnings-per-share expectations. TD Cowen kept its price target at $820 and highlighted an 18% year-over-year increase in impressions for the company.
Overall, the mix of analyst commentary reflects both optimism about recent revenue performance and strategic initiatives and caution about rising capital and operating costs tied to AI and infrastructure investments. Benchmark’s Hold decision centers on the unresolved question of whether the company’s substantial investments will translate into adequate ROIC over the medium term.