In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Meta Platforms META and its primary competitors in the Interactive Media & Services industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 | 23.04 | 7.60 | 8.74 | 12.0% | $28.26 | $39.55 | 20.63% |
| Alphabet Inc | 17.93 | 5.64 | 5.47 | 10.3% | $46.31 | $53.87 | 12.04% |
| Baidu Inc | 9.99 | 0.86 | 1.73 | 1.76% | $7.22 | $16.11 | -2.37% |
| Pinterest Inc | 9.80 | 3.72 | 5.01 | 48.33% | $0.27 | $0.96 | 17.62% |
| Kanzhun Ltd | 31.12 | 3.21 | 6.69 | 3.05% | $0.38 | $1.51 | 15.4% |
| Autohome Inc | 15.29 | 1.01 | 3.52 | 1.25% | $0.23 | $1.35 | -6.7% |
| ZoomInfo Technologies Inc | 108.88 | 1.74 | 2.60 | 0.87% | $0.02 | $0.26 | -2.31% |
| CarGurus Inc | 141.70 | 5.17 | 3.37 | 8.95% | $0.06 | $0.2 | 2.43% |
| Yelp Inc | 18.93 | 3.08 | 1.78 | 5.69% | $0.07 | $0.33 | 5.72% |
| Weibo Corp | 7.05 | 0.58 | 1.24 | 0.25% | $0.14 | $0.36 | -1.48% |
| Tripadvisor Inc | 320.50 | 1.91 | 1.01 | 0.11% | $0.03 | $0.41 | 5.38% |
| Ziff Davis Inc | 21.73 | 0.73 | 0.98 | 3.6% | $0.14 | $0.37 | 5.88% |
| Yalla Group Ltd | 10.85 | 1.80 | 4.33 | 4.72% | $0.03 | $0.06 | 12.24% |
| Average | 59.48 | 2.45 | 3.14 | 7.41% | $4.58 | $6.32 | 5.32% |
By thoroughly analyzing Meta Platforms, we can discern the following trends:
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At 23.04, the stock's Price to Earnings ratio is 0.39x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 7.6, which is 3.1x the industry average, Meta Platforms might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The Price to Sales ratio of 8.74, which is 2.78x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The Return on Equity (ROE) of 12.0% is 4.59% above the industry average, highlighting efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $28.26 Billion, which is 6.17x above the industry average, indicating stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $39.55 Billion, which indicates 6.26x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 20.63% exceeds the industry average of 5.32%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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 considering the debt-to-equity ratio, Meta Platforms exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.27, which can be perceived as a positive aspect by 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.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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