Meta Platforms (META), a leading social networking firm, is back in the news as the firm plans to roll out a new smartwatch, codenamed “Malibu 2.” The firm plans to roll out the new smartwatch later this year. The device will come equipped with health-related features and a Meta AI assistant. The question for investors is this: Will this new product help Meta expand its monetization flywheel?

META stock is currently trading around $655 and remains significantly below its 52-week high. The stock has been volatile over the last few days and is up just slightly over the last five days. META stock also has a negative weighted alpha. The overall tech space is still trying to recover from heavy capital expenditures in the AI space.

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Meta Platforms (META) is a leading social networking firm based in Menlo Park, California. The company operates platforms like Facebook, Instagram, and WhatsApp as well as Reality Labs. Meta has a market capitalization of about $1.65 trillion and is one of the most influential firms in the digital space, operating in both social media and AI infrastructure. The company has also forayed into the augmented reality and wearable spaces.

Over the last 52 weeks, META stock has traded between $479.80 and $796.25. The stock is currently at roughly $655 per share, significantly above its low. The 14-day Relative Strength Indicator (RSI) comes in at 48.8.

From a valuation standpoint, the stock has a trailing price-to-earnings (P/E) ratio of 21.71 times and a forward PE of 21.73 times. The PE-to-growth ratio is 1.1 times, indicating a reasonable alignment between earnings growth and valuation. Meta's profitability ratios — such as a 30.08% profit margin and a 38.61% return on equity — remain robust as well. Finally, the price-to-sales (P/S) ratio of 8.1 times indicates that META stock is trading at a premium but not at a very high one, considering the size and ambition of the company in the AI space.

META also has a dividend policy, paying out $5.32 billion in the form of dividends and $26.26 billion in the form of share repurchases during fiscal 2025.

Meta Platforms reported strong fourth-quarter 2025 earnings on Jan. 28. Revenue for Q4 rose 24% year-over-year (YOY) to $59.89 billion, while revenue for the full fiscal year rose 22% YOY to $200.97 billion. Diluted EPS for Q4 came in at $8.88, representing an 11% YOY increase.

Operating income for Q4 came in at $24.75 billion. However, the operating margin for the fourth quarter came in at 41%, down from 48% a year ago, as the company made higher investments in infrastructure and Reality Labs. Meta's full-year operating margin came in at 41%, relatively steady from the prior year. Notably, capital expenditures for full fiscal 2025 came in at $72.22 billion, pointing to the company’s aggressive push into the AI data center and next-generation computing space.

Daily active people across Family of Apps averaged 3.58 billion in December 2025, representing a 7% increase over the prior year. Ad impressions rose 18% during the fourth quarter, while the average price per ad rose 6%.

Cash flow from operations was $115.8 billion for the year, while free cash flow was $43.59 billion. With cash on hand in the form of cash and marketable securities at $81.59 billion, the company can afford to spend on new hardware ventures such as a smartwatch without compromising its financial security.

Wall Street Analysts are optimistic about META stock with a “Strong Buy” rating consensus. Over the past few months, the sentiment on the stock has remained unchanged despite short-term price fluctuations.

The mean price target of $863.83 represents 32% potential upside from current levels. Analysts are highly optimistic about the stock, as indicated by the high price target of $1,144. Meanwhile, even the low price target of $700 indicates that the stock has some room to climb higher.

On the date of publication, Yiannis Zourmpanos had a position in: META. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com