In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Meta Platforms (NASDAQ:META) in relation to its major competitors in the Interactive Media & Services industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 | 26.63 | 9.45 | 10.65 | 9.65% | $25.12 | $39.02 | 21.61% |
| Alphabet Inc | 26.98 | 8.43 | 8.39 | 7.96% | $39.19 | $57.39 | 13.79% |
| Baidu Inc | 11.01 | 1.07 | 2.23 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 89.65 | 15.75 | 21.51 | 3.88% | $0.07 | $0.45 | 77.69% |
| Pinterest Inc | 12.12 | 4.73 | 6.02 | 0.82% | $0.0 | $0.8 | 16.93% |
| Bilibili Inc | 389.07 | 6.02 | 2.98 | 1.53% | $0.81 | $2.68 | 19.76% |
| Trump Media & Technology Group Corp | 176.67 | 1.95 | 943.76 | -1.26% | $-0.01 | $0.0 | 5.54% |
| CarGurus Inc | 28.97 | 8.25 | 4.13 | 5.34% | $0.06 | $0.2 | 7.01% |
| ZoomInfo Technologies Inc | 44.20 | 2.27 | 3.08 | 1.5% | $0.09 | $0.26 | 5.21% |
| Weibo Corp | 8.07 | 0.77 | 1.72 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 15.20 | 2.80 | 1.56 | 5.98% | $0.07 | $0.33 | 3.75% |
| Tripadvisor Inc | 33.54 | 2.98 | 1.25 | 5.67% | $0.09 | $0.49 | 6.44% |
| Ziff Davis Inc | 24.18 | 0.85 | 1.13 | 1.44% | $0.09 | $0.3 | 9.79% |
| FuboTV Inc | 18.89 | 2.99 | 0.81 | -1.98% | $0.01 | $0.08 | -2.81% |
| Taboola.com Ltd | 85 | 1.09 | 0.63 | -0.45% | $0.02 | $0.14 | 8.71% |
| Average | 68.83 | 4.28 | 71.37 | 2.62% | $3.53 | $5.56 | 12.13% |
After a detailed analysis of Meta Platforms, the following trends become apparent:
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The stock's Price to Earnings ratio of 26.63 is lower than the industry average by 0.39x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 9.45, which is 2.21x 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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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 10.65, which is 0.15x the industry average.
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The company has a higher Return on Equity (ROE) of 9.65%, which is 7.03% 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 exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.12 Billion, which is 7.12x above the industry average, implying stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $39.02 Billion, which indicates 7.02x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 21.61%, which surpasses the industry average of 12.13%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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.
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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Meta Platforms has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.25.
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This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
Key Takeaways
The low PE ratio of Meta Platforms suggests that the company's stock price is relatively undervalued compared to its earnings. In contrast, the high PB ratio indicates that investors are willing to pay a premium for the company's book value. The low PS ratio implies that Meta Platforms is generating strong revenue relative to its market capitalization. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth highlight the company's strong profitability and growth potential compared to its industry peers 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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