In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Meta Platforms (NASDAQ: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 | 26.39 | 8.58 | 9.39 | 9.77% | $22.06 | $33.21 | 18.87% |
| Alphabet Inc | 21.85 | 6.42 | 6.07 | 8.55% | $35.74 | $51.79 | 15.09% |
| Baidu Inc | 10.58 | 0.78 | 1.52 | 2.98% | $9.27 | $17.16 | -2.58% |
| Pinterest Inc | 93.81 | 7.01 | 6.01 | 1.0% | $-0.0 | $0.71 | 17.71% |
| Kanzhun Ltd | 29.40 | 2.77 | 6.16 | 2.92% | $0.36 | $1.6 | 28.85% |
| ZoomInfo Technologies Inc | 354.33 | 2.19 | 3.25 | 1.35% | $0.07 | $0.26 | -3.25% |
| Ziff Davis Inc | 43.46 | 1.42 | 1.91 | -2.68% | $0.02 | $0.3 | 3.69% |
| Yelp Inc | 22.03 | 3.22 | 1.87 | 5.21% | $0.06 | $0.33 | 4.41% |
| Weibo Corp | 6.11 | 0.61 | 1.32 | 3.78% | $0.14 | $0.37 | 5.05% |
| JOYY Inc | 8.50 | 0.37 | 1 | 1.0% | $0.05 | $0.2 | 3.25% |
| Tripadvisor Inc | 53.35 | 2.05 | 1.14 | 4.33% | $0.1 | $0.48 | -0.19% |
| Cars.com Inc | 32.76 | 2.49 | 1.82 | 3.75% | $0.06 | $0.15 | 3.05% |
| Average | 61.47 | 2.67 | 2.92 | 2.93% | $4.17 | $6.67 | 6.83% |
By closely examining Meta Platforms, we can identify the following trends:
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At 26.39, the stock's Price to Earnings ratio is 0.43x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 8.58, which is 3.21x 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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With a relatively high Price to Sales ratio of 9.39, which is 3.22x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 9.77% is 6.84% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.06 Billion is 5.29x above the industry average, highlighting stronger profitability and robust cash flow generation.
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The gross profit of $33.21 Billion is 4.98x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 18.87%, outperforming the industry average of 6.83%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared 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.
By considering the Debt-to-Equity ratio, Meta Platforms can be compared to its top 4 peers, leading to the following observations:
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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 0.3.
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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
For Meta Platforms, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, EBITDA, gross profit, and revenue growth, Meta Platforms outperforms its peers, reflecting strong financial performance and growth potential in the Interactive Media & Services industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
