In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Meta Platforms META against its key competitors in the Interactive Media & Services industry. By examining key 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 | 25.65 | 8.91 | 10.03 | 9.05% | $22.52 | $34.74 | 16.07% |
| Alphabet Inc | 17.80 | 5.61 | 5.44 | 10.3% | $46.31 | $53.87 | 12.04% |
| Baidu Inc | 10 | 0.86 | 1.73 | 1.76% | $7.22 | $16.11 | -2.37% |
| Pinterest Inc | 12.11 | 4.75 | 6.14 | 0.19% | $-0.03 | $0.66 | 15.54% |
| Reddit Inc | 22.61 | 9.39 | 13.87 | 1.2% | $0.01 | $0.36 | 61.49% |
| Kanzhun Ltd | 36.75 | 3.79 | 7.90 | 3.05% | $0.38 | $1.51 | 15.4% |
| Trump Media & Technology Group Corp | 23.71 | 6.51 | 1449.51 | -4.35% | $-0.04 | $0.0 | 33.13% |
| CarGurus Inc | 90.73 | 8.25 | 3.91 | 8.27% | $0.05 | $0.2 | 4.34% |
| ZoomInfo Technologies Inc | 83.58 | 2 | 2.92 | 0.87% | $0.02 | $0.26 | -2.31% |
| Yelp Inc | 19.89 | 3.56 | 1.96 | 3.31% | $0.05 | $0.32 | 7.75% |
| Weibo Corp | 7.51 | 0.61 | 1.32 | 0.25% | $0.14 | $0.36 | -1.48% |
| Tripadvisor Inc | 40.18 | 2.88 | 1.24 | -1.39% | $0.01 | $0.37 | 0.76% |
| Ziff Davis Inc | 19.42 | 0.79 | 1.06 | 1.37% | $0.09 | $0.28 | 4.5% |
| Yalla Group Ltd | 10.51 | 1.74 | 4.20 | 4.72% | $0.03 | $0.06 | 12.24% |
| Vtex | 90.42 | 4.83 | 5.31 | 0.34% | $0.0 | $0.04 | 2.9% |
| Average | 34.66 | 3.97 | 107.61 | 2.14% | $3.87 | $5.31 | 11.71% |
Upon a comprehensive analysis of Meta Platforms, the following trends can be discerned:
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The Price to Earnings ratio of 25.65 is 0.74x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 8.91, which is 2.24x 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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With a relatively low Price to Sales ratio of 10.03, which is 0.09x the industry average, the stock might be considered undervalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 9.05%, which is 6.91% 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 5.82x 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 $34.74 Billion, which indicates 6.54x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 16.07% is notably higher compared to the industry average of 11.71%, showcasing exceptional sales performance and strong demand for its products or services.
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.
When comparing Meta Platforms with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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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 ratio suggests the market values the company's assets highly. A low PS ratio implies sales are generating strong value. Meta Platforms' high ROE, EBITDA, gross profit, and revenue growth outperform industry peers, reflecting strong financial performance and growth potential in the Interactive Media & Services sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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