Comparing Meta Platforms With Industry Competitors In Interactive Media & Services Industry

In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Meta Platforms META alongside its primary competitors in the Interactive Media & Services industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.

Meta Platforms Background

Meta is the world's largest online social network, with nearly 4 billion family of apps monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. The firm's ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the firm's total revenue, with more than 45% coming from the U.S. and Canada and over 20% from Europe.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Meta Platforms Inc 35.19 8.71 10.20 9.47% $20.11 $32.42 24.7%
Alphabet Inc 27.48 6.99 6.60 7.43% $26.04 $48.73 13.49%
Baidu Inc 13.43 1.07 1.95 0.77% $3.64 $17.53 5.67%
Kanzhun Ltd 107.04 4.57 11.50 3.23% $0.26 $1.34 36.32%
ZoomInfo Technologies Inc 60.19 2.90 5.21 -0.25% $0.24 $0.27 4.91%
IAC Inc 16.68 0.70 0.98 5.39% $0.64 $0.75 -15.12%
TripAdvisor Inc 385.86 4.28 2.19 3.78% $0.07 $0.35 10.17%
Yelp Inc 29.71 3.65 2.21 3.68% $0.04 $0.31 10.76%
Ziff Davis Inc 60.45 1.31 1.83 3.43% $0.15 $0.34 -1.72%
CarGurus Inc 120.42 3.99 2.86 -3.56% $-0.01 $0.17 -22.19%
Weibo Corp 4.85 0.62 1.12 2.45% $0.13 $0.35 -2.52%
Getty Images Holdings Inc 81.20 2.61 1.82 6.56% $0.03 $0.16 -2.39%
Shutterstock Inc 14.01 2.87 1.76 -0.19% $0.02 $0.12 -0.23%
Average 76.78 2.96 3.34 2.73% $2.6 $5.87 3.1%

By closely examining Meta Platforms, we can identify the following trends:

  • A Price to Earnings ratio of 35.19 significantly below the industry average by 0.46x suggests undervaluation. This can make the stock appealing for those seeking growth.

  • The elevated Price to Book ratio of 8.71 relative to the industry average by 2.94x suggests company might be overvalued based on its book value.

  • With a relatively high Price to Sales ratio of 10.2, which is 3.05x the industry average, the stock might be considered overvalued based on sales performance.

  • The Return on Equity (ROE) of 9.47% is 6.74% above the industry average, highlighting efficient use of equity to generate profits.

  • With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $20.11 Billion, which is 7.73x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

  • The company has higher gross profit of $32.42 Billion, which indicates 5.52x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • With a revenue growth of 24.7%, which surpasses the industry average of 3.1%, the company is demonstrating robust sales expansion and gaining market share.

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.

When assessing Meta Platforms against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

  • Meta Platforms exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.24.

  • This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.

Key Takeaways

The PE, PB, and PS ratios for Meta Platforms indicate that it may be overvalued compared to its peers in the Interactive Media & Services industry. However, its high ROE, EBITDA, gross profit, and revenue growth suggest strong operational performance and growth potential relative to industry competitors. Investors may want to further investigate the company's financial health and growth prospects before making any decisions.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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