Meta Platforms and Atlassian have been highlighted as Zacks Bull and Bear of the Day

Globe and Mail

23-07-2025

For Immediate Release
Chicago, IL – July 23, 2025 – Zacks Equity Research shares Meta Platforms META as the Bull of the Day and Atlassian TEAM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Opendoor Technologies Inc. OPEN and Carvana Co. CVNA.
Here is a synopsis of all four stocks.
Bull of the Day:
Set to report its quarterly results on Wednesday, July 30, Meta Platforms stock could be the highlight of the Q2 earnings season.
Notably, Meta has now surpassed the Zacks EPS Consensus for 10 consecutive quarters, as illustrated by the green arrows in the Price, Performance, and Surprise chart below, on the way to gains of more than +300% in the last three years.
Outperforming the broader market in 2025, META is up +20% year to date with its impressive EPS surprise streak expected to continue along with considerable expansion on the top and bottom lines.
Furthermore, Meta's AI infrastructure expansion is a reason to believe the social media giant could steal the spotlight regarding standouts of the Q2 earnings season.
Meta's Q2 Expectations
With Meta reaping major rewards from its aggressive push into generative AI, the company's Q2 sales are thought to have increased 14% to $44.69 billion compared to $39.07 billion a year ago. Plus, Q2 earnings are expected to stretch 12% to $5.80 per share from EPS of $5.16 in the prior year quarter.
More intriguing, the Zacks ESP (Expected Surprise Prediction) suggests Meta could once again surpass earnings expectations with the Most Accurate and recent estimates among Wall Street having Q2 EPS pegged at $5.90 and nearly 2% above the underlying Zacks Consensus.
Meta's AI Infrastructure Expansion
Of course, the benefiting metrics to support Meta's AI expansion could help lead to a post-earnings pop. To that point, Meta has gone all out on a bold strategy that combines massive AI infrastructure investment, elite talent acquisition, and cutting-edge model development.
Supporting Meta's push toward 'superintelligence' are several AI data centers and systems that are on the horizon with the capability to enhance reasoning and coding, interacting at human-like levels.
Prometheus: A 1-gigawatt facility in Ohio, launching in 2026.
Hyperion: A 5-gigawatt campus in Louisiana, which is one of the world's largest AI data centers.
Titan Clusters: Additional multi-gigawatt AI supercomputing data centers planned across North America and Europe.
AI's Expanding Social Role
It's noteworthy that Meta's Advantage+ Ads use AI to optimize targeting and performance with minimal manual input. Leading to more advertising revenue for Meta is that advertisers are seeing higher ROI from the monetization of AI across Meta's massive user base. Powering smart replies, content recommendation, and moderation, Meta AI is embedded in Facebook, Instagram, WhatsApp, and Messenger, reaching 700+ million monthly active users.
It's also worth mentioning that Meta's "LLaMA" large language models (LLMs) are open-source regarding their AI capabilities that understand and generate human-like processes, which has attracted developers and startups to build on the technology. Overlapping the scale of potential that Meta is creating is that AI chatbots and virtual assistants are being used for a variety of companionship roles, as friends, therapists, and even romantic partners…
Meta's EPS Growth & Positive Revisions
Correlating with the strong YTD price performance for META, EPS revisions have continued to trend higher across the board for Meta's current reporting quarter (Q2), Q3, fiscal 2025 as a whole, and FY26. Even better, and indicative of more upside in Meta's stock ahead of its Q2 report, is that these EPS revisions are nicely up in the last week.
Meta's annual earnings are now expected to increase 7% this year and are projected to rise another 9% in FY26 to a whopping $27.89 per share. Most mind-blowing, following the pandemic, FY26 EPS projections would reflect 176% growth with Meta's earnings at $10.09 a share in 2020.
Meta's Reasonable P/E Valuation
Despite a lofty price tag of over $700 a share, Meta stock is still the second cheapest company among its 'Magnificent 7' big tech peers in terms of P/E valuation.
At just under 28X forward earnings, META is only above Alphabet's GOOGL 19.2X but is the next closest of the Mag 7 to the benchmark S&P 500's average, with Tesla TSLA having the most stretched P/E premium among the group at 185.5X.
Bottom Line
Meta Platforms stock has continued to create the eustress that led to some investors taking profits too soon, and optimistically, META looks poised to keep running past $700 a share as its Q2 results approach next week.
Keeping this in mind, in addition to sporting a Zacks Rank #1 (Strong Buy) and landing the Bull of the Day, META checks an 'A' Zacks Style Scores grade for Growth and Momentum.
Bear of the Day:
Despite being a global leader and innovator in the enterprise collaboration and workflow software space, Atlassian has faced increased competition from a growing number of notable competitors, including Microsoft, ServiceNow and Monday.com.
Making matters worse is that Atlassian's stock has been under increased pressure due to heavy insider selling, slower growth, and disappointing guidance.
Unfortunately, with TEAM shares down nearly 20% this year, more risk appears to be ahead as Atlassian stock still trades at a somewhat stretched valuation.
Heavy Insider Selling
Notably, cause for concern has been raised after Atlassian's founders, Scott Farquhar and Michael Cannon-Brookes, reportedly sold millions of dollars' worth of TEAM shares earlier in the month.
More concerning, over the last year, insiders have now dumped over 4 million TEAM shares worth $800 million, with no insider purchases made during this period.
Atlassian's Soft Revenue Guidance
Although Atlassian was most recently able to surpass expectations for its fiscal third quarter in early May, slower growth from the comparative period further caught investors' attention as the company's guidance for Q4 revenue of $1.35-$1.36 billion was below most analysts' expectations of $1.42 billion.
This comes as Atlassian's rapid sales growth has previously justified the earnings premium investors have paid in the past, although it's noteworthy that the company has been public since 2015.
Also worth mentioning is that Atlassian emphasized that it's trading short-term revenue upside for long-term platform adoption, especially by bundling its AI assistant Rovo into Premium and Enterprise subscriptions at no extra cost. Still, while AI is a strategic priority, it's also driving up Atlassian's expenses and dimming margins.
Atlassian's Lofty Valuation
Amid concerns that Atlassian can maintain its growth trajectory, TEAM is still trading at almost $200 a share and 47.3X forward earnings. While tech stocks can often command a premium to the benchmark S&P 500, which is at 24X, Atlassian stock trades noticeably above its Zacks Internet-Software Industry average of 29.1X as well.
In terms of price-to-sales, Atlassian's forward P/S ratio of 8.3X is also stretched compared to its industry average of 6.3X and the S&P 500's 5.4X.
Bottom Line
While the strategic move to ramp up AI integration in its collaboration and workflow software services will hopefully pay off down the line, it may be best to avoid Atlassian's stock at the moment. To that point, there are more viable investment options to consider as it relates to internet-software stocks, with Microsoft being a prime example as a more refined leader and an emerging competitor to Atlassian.
Additional content:
After a 42% Rally, Is Opendoor the Next Carvana (and a Buy)?
Opendoor Technologies Inc. shares have strengthened as retail investors piled on to the meme stock, hoping for a recovery similar to Carvana Co. despite housing market headwinds. Is now a good time to invest in OPEN stock, and can it rebound like Carvana? Let's explore this.
Why Opendoor's Shares Jumped
As an iBuying platform, Opendoor's business model involves purchasing homes from sellers online, renovating them, and then reselling at higher prices. The online home flipper's business was successful during the real estate boom, but it struggled post-pandemic as homeowners who bought houses cheaply were hesitant to sell.
Rising interest rates and a sluggish housing market did little to boost Opendoor's business, and its shares have fallen 96% from their peak in 2021. However, recently, Opendoor's shares gained momentum as retail investors showed interest through social media platforms.
Opendoor's shares jumped 42.7% on Monday as interest in the stock increased on Reddit's WallStreetBets Page and other sites. EMJ Capital founder Eric Jackson is also optimistic about the stock and expects Opendoor to trade at $82 a share soon. Currently, Opendoor is trading below $4 per share.
Reasons to Be Bullish on Opendoor Stock
Opendoor's first-quarter results have been encouraging, as the company announced a gross profit of $99 million on total revenues of $1.2 billion. Its net loss for the quarter was $63 million, down from a $80 million net loss a year earlier. It posted an adjusted EBITDA loss of $30 million but expects an adjusted EBITDA profit between $10 million and $20 million in the second quarter.
Opendoor's efforts to adopt a real estate agent-assisted business model could prove to be advantageous, as it offers higher profit margins and greater capital efficiency. If mortgage rates decline and housing demand rises, Opendoor could see further recovery.
Is Opendoor Stock the Next Carvana?
Numerous individuals are drawing parallels between Opendoor's present recovery and the turnaround achieved by Carvana, which experienced a similar rebound following its bankruptcy in 2022. However, before Carvana stock's downfall, the company was consistently reporting quarterly revenue growth.
Eventually, Carvana capitalized on the favorable market conditions in 2023 and 2024, reduced expenditures, and increased profits through the sale of pre-owned vehicles.
Can Opendoor repeat the same success? Unlike Carvana, Opendoor is not bankrupt; instead, its business model is questionable. Few companies have managed to successfully scale home-flipping, with many withdrawing from the iBuying market. On the other hand, the used car sales industry is a well-established business. Therefore, comparing Carvana and Opendoor is not accurate.
Here's How to Trade Opendoor Stock Now
A potential shift in its business model, along with changes in broader housing market trends, may lead to a recovery for Opendoor, prompting stakeholders to hold onto their shares.
However, new entrants should invest at their own risk since Opendoor's current share price is not supported by its underlying financial performance. Moreover, if tariffs rise, the resulting higher prices would complicate the process of reducing interest rates, thereby exerting pressure on Opendoor's business.
Additionally, Opendoor has a 242.6% debt-to-equity ratio, much higher than the Internet - Software industry's average of 16.4%, indicating greater financial risk and more susceptibility to economic downturns.
For now, Opendoor has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Opendoor Technologies Inc. (OPEN): Free Stock Analysis Report
Atlassian Corporation PLC (TEAM): Free Stock Analysis Report
Carvana Co. (CVNA): Free Stock Analysis Report
Meta Platforms, Inc. (META): Free Stock Analysis Report