In today’s rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Meta Platforms (NASDAQ:META) against its key competitors in the Interactive Media & Services industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company’s performance within the industry.
Meta Platforms Background
Meta is the largest social media company in the world, boasting close to 4 billion monthly active users worldwide. The firm’s “Family of Apps,” its core business, consists of Facebook, Instagram, Messenger, and WhatsApp. End users can leverage these applications for a variety of different purposes, from keeping in touch with friends to following celebrities and running digital businesses for free. Meta packages customer data, gleaned from its application ecosystem and sells ads to digital advertisers. While the firm has been investing heavily in its Reality Labs business, it remains a very small part of Meta’s overall sales.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Meta Platforms Inc | 25.03 | 8.70 | 9.79 | 9.05% | $22.52 | $34.74 | 16.07% |
| Alphabet Inc | 18.55 | 5.84 | 5.66 | 10.3% | $46.31 | $53.87 | 12.04% |
| Baidu Inc | 9.77 | 0.84 | 1.69 | 1.76% | $7.22 | $16.11 | -2.37% |
| Pinterest Inc | 11.97 | 4.70 | 6.07 | 0.19% | $-0.03 | $0.66 | 15.54% |
| Reddit Inc | 22.69 | 9.42 | 13.92 | 1.2% | $0.01 | $0.36 | 61.49% |
| Kanzhun Ltd | 37.80 | 3.90 | 8.13 | 3.05% | $0.38 | $1.51 | 15.4% |
| Trump Media & Technology Group Corp | 23.10 | 6.34 | 1412.06 | -3.51% | $-0.03 | $0.0 | 6.58% |
| ZoomInfo Technologies Inc | 85 | 2.04 | 2.96 | 1.6% | $0.07 | $0.26 | -1.42% |
| CarGurus Inc | 87.73 | 7.98 | 3.78 | 8.27% | $0.05 | $0.2 | 4.34% |
| Yelp Inc | 19.19 | 3.43 | 1.89 | 3.31% | $0.05 | $0.32 | 7.75% |
| Weibo Corp | 7.33 | 0.60 | 1.28 | 0.25% | $0.14 | $0.36 | -1.48% |
| Tripadvisor Inc | 39.23 | 2.81 | 1.21 | -1.39% | $0.01 | $0.37 | 0.76% |
| Ziff Davis Inc | 18.62 | 0.75 | 1.01 | 1.37% | $0.09 | $0.28 | 4.5% |
| Yalla Group Ltd | 10.61 | 1.76 | 4.23 | 4.72% | $0.03 | $0.06 | 12.24% |
| Taboola.com Ltd | 85.25 | 1.21 | 0.66 | -0.85% | $0.01 | $0.12 | 3.26% |
| Average | 34.06 | 3.69 | 104.61 | 2.16% | $3.88 | $5.32 | 9.9% |
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By closely examining Meta Platforms, we can identify the following trends:
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The stock’s Price to Earnings ratio of 25.03 is lower than the industry average by 0.73x, suggesting potential value in the eyes of market participants.
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The elevated Price to Book ratio of 8.7 relative to the industry average by 2.36x suggests company might be overvalued based on its book value.
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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 9.79, which is 0.09x the industry average.
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The company has a higher Return on Equity (ROE) of 9.05%, which is 6.89% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.52 Billion, which is 5.8x above the industry average, indicating stronger profitability and robust cash flow generation.
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The gross profit of $34.74 Billion is 6.53x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 16.07%, outperforming the industry average of 9.9%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company’s capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company’s financial health and risk profile, aiding in informed decision-making.
In light of the Debt-to-Equity ratio, a comparison between Meta Platforms and its top 4 peers reveals the following information:
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When comparing the debt-to-equity ratio, Meta Platforms is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.27.
Key Takeaways
For Meta Platforms, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB ratio suggests the market values the company’s assets highly. A low PS ratio implies sales are generating strong value. The high ROE, EBITDA, gross profit, and revenue growth highlight the company’s strong financial performance within the Interactive Media & Services industry.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.