META's Next Big Test: Previewing Its Fast-Approaching Q3 Earnings

Key Points

• Meta Platforms will be one of three tech giants to report financials on Oct. 29. The company will look to build on its strong momentum from last quarter.
• What are the key factors investors should watch in Meta's results and commentary?
• With shares down since the company's last post-earnings spike, Meta could be in an advantageous position going into earnings.

October 29 is set to be a highly consequential day for the stock market.

Three of the world’s most important tech companies will report financial results after hours, setting up the opportunity for the market to make a big move.

Along with Alphabet NASDAQ: GOOGL and Microsoft NASDAQ: MSFT, social media leader Meta Platforms NASDAQ: META will report its Q3 earnings.

So, what should investors be looking at regarding Meta’s upcoming results?

Below, we’ll dive into the key points investors should know.

Meta Looks to Repeat Q2’s Revenue Growth to Keep Up With Wall Street

Meta will want to meet, or ideally exceed, Wall Street expectations on sales and adjusted earnings per share (EPS). It did so in resounding fashion last quarter, causing shares to spike more than 11% on July 31. Wall Street projects that Meta will generate sales of $49.34 billion. This would equate to a growth rate of just under 22%, essentially the same as Meta’s growth rate last quarter.

On adjusted EPS, analysts predict that Meta will generate $6.74. That would equal a growth rate of 12%. Notably, the firm has generated adjusted EPS growth above 35% for the last four quarters. 

Given its past performance, these don’t seem like overly difficult figures for Meta to achieve. However, Meta will still need a good quarter to maintain its revenue growth. The 22% figure in Q2 2025 was its highest since Q2 2024.

Markets will also likely want to see Meta’s ad impression delivery growth and the average price per ad remain at or above 10%. Last quarter, these figures came in at 11% and 9%, respectively. Engagement increases on Facebook and Instagram will also be key, as will updates to Meta’s expense guidance. Higher-than-expected expense guidance would be a downside catalyst.

Meta’s New AI Glasses: Management Commentary Could Be Telling

Unfortunately, markets must wait another quarter to see concrete results around Meta’s Ray-Ban Display artificial intelligence (AI) glasses. They are the latest innovation in Meta’s AI glasses push, incorporating a display and hand gesture controls. Initial reviews have been positive, and the device’s increased functionality could mark a turning point in adopting Meta’s AI glasses. However, Meta released the product on Sept. 30, meaning sales won’t appear in its Q3 financials.

Still, the company will likely comment or face questions regarding the product’s adoption since its release. Whether the company highlights the device or filibusters on questions will provide an early sign of whether it can be a needle mover for Meta. Encouraging comments could be a moderately positive catalyst for the stock.

Meta Shares Trading in a Favorable Range Going Into Q3 Results

Importantly, Meta shares have retreated considerably since spiking after the company’s last earnings. Shares closed at around $773 on July 31, the day after its Q2 release. On Oct. 20, they closed at around $732, down more than 5% from that level. Meta’s forward price-to-earnings (P/E) ratio has contracted from around 27.5x to 25.5x.

Assuming shares continue trading near or below $770 before the release, the market’s expectations should align with Wall Street expectations. When a stock rises significantly between earnings reports, its next release can often face increased scrutiny.

The higher share price is a product of multiple expansion, signaling that markets may be pricing in stronger results than Wall Street. Meeting or even slightly beating Wall Street estimates can lead to a sell-off in these situations.

However, if share price conditions above hold, the market's judgment on Meta’s Q3 shouldn’t be excessively harsh. This may help limit downside risk and increase the chance of shares gaining after earnings.

Still, the company will need to meet or exceed estimates to avoid a sell-off or achieve a gain. Additionally, there is always the possibility of an unexpected issue or opportunity arising during the earnings call. This can lead to post-earnings upside or downside, even if the financials are in line.

Meta has had a strong 2025, providing a total return of around 25% year-to-date. However, shares have stagnated recently, while Alphabet has surged more than 35% in the past three months. Meta’s forward P/E ratio of approximately 25.5x is the lowest among all Magnificent Seven stocks, indicating that Meta shares are in a strong position ahead of earnings.