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 | 26.57 | 8.64 | 9.45 | 9.77% | $22.06 | $33.21 | 18.87% |
| Alphabet Inc | 22.23 | 6.53 | 6.17 | 8.55% | $35.74 | $51.79 | 15.09% |
| Baidu Inc | 10.76 | 0.80 | 1.55 | 2.19% | $7.46 | $17.53 | -0.37% |
| Pinterest Inc | 91.59 | 6.84 | 5.86 | 1.0% | $-0.0 | $0.71 | 17.71% |
| Kanzhun Ltd | 29.81 | 2.81 | 6.25 | 2.92% | $0.36 | $1.6 | 28.85% |
| ZoomInfo Technologies Inc | 345.67 | 2.13 | 3.17 | 1.35% | $0.07 | $0.26 | -3.25% |
| Ziff Davis Inc | 42.70 | 1.40 | 1.88 | -2.68% | $0.02 | $0.3 | 3.69% |
| Yelp Inc | 21.70 | 3.17 | 1.85 | 5.21% | $0.06 | $0.33 | 4.41% |
| Weibo Corp | 6.14 | 0.61 | 1.33 | 3.78% | $0.14 | $0.37 | 5.05% |
| JOYY Inc | 9.03 | 0.40 | 1.06 | 1.0% | $0.05 | $0.2 | 3.25% |
| Tripadvisor Inc | 51.73 | 1.99 | 1.10 | 4.33% | $0.1 | $0.48 | -0.19% |
| Hello Group Inc | 6.64 | 0.75 | 0.82 | 3.57% | $0.54 | $1.1 | -14.22% |
| Average | 58.0 | 2.49 | 2.82 | 2.84% | $4.05 | $6.79 | 5.46% |
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By thoroughly analyzing Meta Platforms, we can discern the following trends:
At 26.57, the stock's Price to Earnings ratio is 0.46x less than the industry average, suggesting favorable growth potential.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 8.64 which exceeds the industry average by 3.47x.
With a relatively high Price to Sales ratio of 9.45, which is 3.35x 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 6.93% 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 5.45x above the industry average, implying stronger profitability and robust cash flow generation.
The company has higher gross profit of $33.21 Billion, which indicates 4.89x above the industry average, indicating stronger profitability and higher earnings from its core operations.
With a revenue growth of 18.87%, which surpasses the industry average of 5.46%, 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.
By evaluating Meta Platforms against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
Meta Platforms demonstrates a stronger financial position compared to its top 4 peers in the sector.
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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
