Buy or Sell META Stock Ahead of Its Upcoming Earnings?

Forbes

5 days ago

CHONGQING, CHINA - JULY 28: In this photo illustration, a person holds a smartphone displaying the ... More logo of Meta Platforms Inc. (NASDAQ: META), the parent company of Facebook, Instagram, and WhatsApp, with the company's blue infinity loop symbol visible in the background, on July 28, 2025 in Chongqing, China. (Photo illustration by)
Meta Platforms (NASDAQ:META) is set to publish its earnings report on Wednesday, July 30, 2025. For those trading based on events, analyzing Meta's historical stock behavior surrounding earnings can be vital, although the actual outcomes compared to expectations will predominantly influence the market.
In the last five years, Meta's stock has portrayed a notably volatile yet evenly distributed reaction to earnings surprises. In 50% of the cases, the stock recorded a positive one-day return, yielding a notable median increase of 7.7% and a peak one-day rise of 23.3%. On the other hand, in the remaining 50% of situations, the stock faced a negative one-day return, with a median decrease of -4.7% and a peak one-day fall of -26.4%. This symmetrical but extreme historical behavior emphasizes the substantial risk and reward linked to trading Meta around earnings announcements.
Considering this historical tendency, event-driven traders may choose between two main strategies:
Currently, analysts forecast Meta to report earnings of $5.90 per share with revenues of $44.8 billion. These projections indicate growth compared to the same quarter last year, when Meta reported earnings of $5.16 per share on revenues of $39.07 billion.
From a fundamental perspective, Meta Platforms holds a significant current market capitalization of $1.8 trillion. Over the past year, the company produced $170 billion in revenue, presenting strong operational profitability with $73 billion in operating profits and a net income of $67 billion.
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See earnings reaction history of all stocks
Meta Platforms' Historical Odds Of Positive Post-Earnings Return
Here are some insights on one-day (1D) returns following earnings announcements:
Additional information for observed 5-Day (5D) and 21-Day (21D) returns following earnings is summarized along with the statistics in the table below.
META 1D, 5D, and 21D Post Earnings Return
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky approach (though ineffective if the correlation is weak) is to comprehend the correlation between short-term and medium-term returns post earnings, identify a pair with the strongest correlation, and carry out the correct trade. For instance, if 1D and 5D reflect the highest correlation, a trader can take a 'long' position for the next 5 days if the 1D post-earnings return is positive. Here is some correlation information based on 5-year and 3-year (more recent) data. Note that the correlation 1D_5D denotes the relationship between 1D post-earnings returns and the subsequent 5D returns.
META Correlation Between 1D, 5D, and 21D Historical Returns
Is There Any Correlation With Peer Earnings?
Occasionally, peer performance can affect stock reactions following earnings announcements. Indeed, the pricing-in may begin prior to the announcements. Below is some historical data regarding the past post-earnings performance of Meta Platforms stock compared to the stock behaviors of peers that released earnings shortly before Meta Platforms. For a fair assessment, the returns of peer stocks also signify post-earnings one-day (1D) returns.
META Correlation With Peer Earnings
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