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 (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 | 29.44 | 9.57 | 10.47 | 9.77% | $22.06 | $33.21 | 18.87% |
| Alphabet Inc | 23.17 | 6.81 | 6.43 | 8.55% | $35.74 | $51.79 | 15.09% |
| Baidu Inc | 11.42 | 0.85 | 1.64 | 2.98% | $9.27 | $17.16 | -2.58% |
| Pinterest Inc | 100.88 | 7.54 | 6.46 | 1.0% | $-0.0 | $0.71 | 17.71% |
| Kanzhun Ltd | 32.19 | 3.03 | 6.75 | 2.92% | $0.36 | $1.6 | 28.85% |
| ZoomInfo Technologies Inc | 368 | 2.27 | 3.37 | 1.35% | $0.07 | $0.26 | -3.25% |
| Yelp Inc | 23.66 | 3.45 | 2.01 | 5.21% | $0.06 | $0.33 | 4.41% |
| Ziff Davis Inc | 43.57 | 1.42 | 1.92 | -2.68% | $0.02 | $0.3 | 3.69% |
| JOYY Inc | 12.55 | 0.42 | 1.15 | 1.17% | $0.06 | $0.21 | -1.48% |
| Weibo Corp | 6.73 | 0.67 | 1.45 | 3.78% | $0.14 | $0.37 | 5.05% |
| Tripadvisor Inc | 55.12 | 2.12 | 1.18 | 4.33% | $0.1 | $0.48 | -0.19% |
| Hello Group Inc | 6.87 | 0.78 | 0.85 | 3.57% | $0.54 | $1.1 | -14.22% |
| Average | 62.2 | 2.67 | 3.02 | 2.93% | $4.21 | $6.76 | 4.83% |
By carefully studying Meta Platforms, we can deduce the following trends:
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With a Price to Earnings ratio of 29.44, which is 0.47x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 9.57 which exceeds the industry average by 3.58x.
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The Price to Sales ratio of 10.47, which is 3.47x 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 9.77%, which is 6.84% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.06 Billion, which is 5.24x 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 $33.21 Billion, which indicates 4.91x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 18.87% exceeds the industry average of 4.83%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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 assessing Meta Platforms against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Meta Platforms demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.3, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively 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.
