u/run_midnight ·
Reddit — r/wallstreetbets
· May 02, 2026 at 02:23
· ⬆ 15 pts
· 💬 45 comments
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AI Summary
Summary
The author analyzes Meta’s Q2 2026 earnings forecast, projecting revenue of ~$59.7B, EPS of $7.10, and a price target of $825 (20-30 P/E) for Q2, rising toward $1,000 by late 2026.
Thesis: Meta is undervalued after recent beatdown; revenue growth of 12.6% H2 and manageable expenses justify higher multiples; author is long with shares and short puts to accumulate on dips.
Quality: Moderately well-researched DD with detailed financial model, but relies on assumed P/E expansion (30x) and may overestimate sustained revenue growth.
Score15
Comments45
Upvote %83%
▶ Full Post Text
You guys don't like numbers, so I'll keep it short...
Meta's been beaten down, so this'll examine it's earnings to see if it's justified, and give revenue, EPS and price targets to look out for
**Expenses and Net income**
First, let's look at Meta's revenue. Meta states that they're going to recieved up to $61 B in revenue for Q2, let's see what my model suggests...
| q | rev | exp | interest | tax | NI |
| :-: | :-: | :-: | :-: | :-: | :-: |
| q4 '25 | 59893 | 35148 | 609 | 2586 | 22768 |
| q1 '26 | 56311 | 33439 | -1120 | -5021 | 26773 |
| q2 '26 | *59'743* | *38'710* | *313* | *3'195* | *18'150* |
| q3 '26 | *63'303* | *42'810* | *307* | *3'348* | *17'452* |
| q4 '26 | *67'240* | *47'233* | *313* | *3'538* | *16'781* |
The model suggests $59.7 B for the second quarter and for rest of the year a 12.63% jump... On $60 B that's huge!
Expenses are going to take a hit, I had to bump up the numbers manually to accommodate for the increased CapEx and full year expense forecast on the earnings call.
**Revenue check**
Looking at their revenue again, in this section I'm going to double check that the initial values of the checksum are accurate by running the model again on their revenue sources as claimed on the balance sheet...
| Q | Ads | Other Rev | Reality Labs | Total Rev |
| :-: | :-: | :-: | :-: | :-: |
| Q4 '25 | 58'137 | 801 | 955 | 59'893 |
| Q1 '26 | 55'024 | 885 | 402 | 56'311 |
| Q2 '26 | 58'337.14 | 985.70 | 531.64 | *59'854.48* |
| Q3 '26 | 61'737.58 | 1108.96 | 737.65 | *63'584.19* |
| Q4 '26 | 65'472.76 | 1248.93 | 1080.91 | *67'802.61* |
The revenue numbers here are within a reasonable margin of error, so onto what you're here for, the EPS and price targets...
| q | shares | eps | ttm x 20 pe | ttm x 30 pe |
| :-: | :-: | :-: | :-: | :-: |
| Q1 '26 | 2'564 | 10.44 | 550.26 | **825.39** |
| Q2 '26 | 2'556.48 | **7.10** | 549.42 | **824.14** |
| Q3 '26 | 2'549.88 | **6.84** | 665.25 | **997.87** |
| Q4 '26 | 2'543.69 | **6.60** | 619.66 | **929.50** |
For the period of time before second quarter earnings, I'm seeing values as low as 550. **For the second quarter, I'm seeing values as high 825, if Meta can reclaim a 30 PE.** For the later in the year, I'm targeting a price just under $1000 with a PE of 30.
Position: 100 shares @ 611; 5 short puts (Jun 12, 585 @ 8.24) ... I'll be loading up on the way down.
Author’s model projects Meta Q2 2026 revenue at ~$59.7B, EPS $7.10, and full‑year EPS trending down but still high; historical P/E expansion to 30x yields price targets of $825 (Q2) and ~$1,000 (late 2026). Current share price (~$611) offers a discount to even the 20x P/E target (~$550), and the author expects strong ad revenue growth and Reality Labs capex to eventually pay off, creating a buying opportunity ahead of earnings catalysts. Buy shares and sell short puts (e.g., Jun 12 585P) to accumulate at lower cost; the author is already positioned and plans to “load up on the way down.” Revenue growth may miss if ad market slows or Reality Labs losses widen; expenses (CapEx) could exceed guidance; P/E compression if the broader market re-rates growth stocks lower; the “trade sideways for years” comment highlights potential stagnation.