In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Meta Platforms (NASDAQ:META) in relation to its major competitors in the Interactive Media & Services industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in 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 | 28.97 | 9.42 | 10.31 | 9.77% | $22.06 | $33.21 | 18.87% |
| Alphabet Inc | 23.13 | 6.80 | 6.42 | 8.55% | $35.74 | $51.79 | 15.09% |
| Baidu Inc | 11.23 | 0.83 | 1.62 | 2.98% | $9.27 | $17.16 | -2.58% |
| Pinterest Inc | 100.94 | 7.54 | 6.46 | 1.0% | $-0.0 | $0.71 | 17.71% |
| Kanzhun Ltd | 31.21 | 2.94 | 6.54 | 2.92% | $0.36 | $1.6 | 28.85% |
| ZoomInfo Technologies Inc | 373.33 | 2.31 | 3.42 | 1.35% | $0.07 | $0.26 | -3.25% |
| Yelp Inc | 23.67 | 3.45 | 2.01 | 5.21% | $0.06 | $0.33 | 4.41% |
| Ziff Davis Inc | 43.90 | 1.43 | 1.93 | -2.68% | $0.02 | $0.3 | 3.69% |
| JOYY Inc | 12.31 | 0.42 | 1.13 | 1.17% | $0.06 | $0.21 | -1.48% |
| Weibo Corp | 6.55 | 0.65 | 1.41 | 3.78% | $0.14 | $0.37 | 5.05% |
| Tripadvisor Inc | 56 | 2.15 | 1.19 | 4.33% | $0.1 | $0.48 | -0.19% |
| Cars.com Inc | 34.07 | 2.59 | 1.90 | 3.75% | $0.06 | $0.15 | 3.05% |
| Average | 65.12 | 2.83 | 3.09 | 2.94% | $4.17 | $6.67 | 6.4% |
By conducting an in-depth analysis of Meta Platforms, we can identify the following trends:
-
With a Price to Earnings ratio of 28.97, which is 0.44x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
-
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 9.42 which exceeds the industry average by 3.33x.
-
With a relatively high Price to Sales ratio of 10.31, which is 3.34x the industry average, the stock might be considered overvalued based on sales performance.
-
The company has a higher Return on Equity (ROE) of 9.77%, which is 6.83% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
-
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.06 Billion, which is 5.29x above the industry average, implying stronger profitability and robust cash flow generation.
-
Compared to its industry, the company has higher gross profit of $33.21 Billion, which indicates 4.98x above the industry average, indicating stronger profitability and higher earnings from its core operations.
-
The company's revenue growth of 18.87% exceeds the industry average of 6.4%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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.
In terms of the Debt-to-Equity ratio, Meta Platforms stands in comparison with its top 4 peers, leading to the following comparisons:
-
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.
-
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 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.
