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 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 | 23.43 | 8.18 | 9.16 | 9.05% | $22.52 | $34.74 | 16.07% |
| Alphabet Inc | 18.33 | 5.77 | 5.60 | 10.3% | $46.31 | $53.87 | 12.04% |
| Baidu Inc | 9.96 | 0.86 | 1.72 | 1.76% | $7.22 | $16.11 | -2.37% |
| Reddit Inc | 23.31 | 9.68 | 14.30 | 1.2% | $0.01 | $0.36 | 61.49% |
| Pinterest Inc | 10.29 | 3.91 | 5.26 | 48.33% | $0.27 | $0.96 | 17.62% |
| Kanzhun Ltd | 34.29 | 3.54 | 7.38 | 3.05% | $0.38 | $1.51 | 15.4% |
| Autohome Inc | 14.67 | 0.97 | 3.38 | 1.25% | $0.23 | $1.35 | -6.7% |
| ZoomInfo Technologies Inc | 113.75 | 1.82 | 2.71 | 0.87% | $0.02 | $0.26 | -2.31% |
| CarGurus Inc | 140.05 | 5.11 | 3.33 | 8.95% | $0.06 | $0.2 | 2.43% |
| Yelp Inc | 18.63 | 3.03 | 1.75 | 5.69% | $0.07 | $0.33 | 5.72% |
| Weibo Corp | 7.30 | 0.60 | 1.28 | 0.25% | $0.14 | $0.36 | -1.48% |
| Tripadvisor Inc | 318.25 | 1.59 | 1.01 | 0.11% | $0.03 | $0.41 | 5.38% |
| Ziff Davis Inc | 22.34 | 0.75 | 1.01 | 3.6% | $0.14 | $0.37 | 5.88% |
| Yalla Group Ltd | 9.50 | 1.57 | 3.79 | 4.72% | $0.03 | $0.06 | 12.24% |
| Average | 56.97 | 3.02 | 4.04 | 6.93% | $4.22 | $5.86 | 9.64% |
By closely examining Meta Platforms, we can identify the following trends:
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A Price to Earnings ratio of 23.43 significantly below the industry average by 0.41x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The elevated Price to Book ratio of 8.18 relative to the industry average by 2.71x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 9.16, which is 2.27x 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 company has a higher Return on Equity (ROE) of 9.05%, which is 2.12% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.52 Billion, which is 5.34x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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With higher gross profit of $34.74 Billion, which indicates 5.93x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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With a revenue growth of 16.07%, which surpasses the industry average of 9.64%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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.
By analyzing Meta Platforms in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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Compared to its top 4 peers, Meta Platforms has a stronger financial position indicated by its lower debt-to-equity ratio of 0.27.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
For Meta Platforms, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest the market values the company's assets and sales highly. In terms of ROE, EBITDA, gross profit, and revenue growth, Meta Platforms outperforms its industry peers, reflecting strong financial performance and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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