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 | 26.16 | 8.51 | 9.31 | 9.77% | $22.06 | $33.21 | 18.87% |
| Alphabet Inc | 23.25 | 6.83 | 6.45 | 8.55% | $35.74 | $51.79 | 15.09% |
| Baidu Inc | 11.24 | 0.86 | 1.62 | 2.19% | $7.46 | $17.53 | -0.37% |
| Pinterest Inc | 90.59 | 6.77 | 5.80 | 1.0% | $-0.0 | $0.71 | 17.71% |
| Kanzhun Ltd | 31.75 | 2.99 | 6.65 | 2.92% | $0.36 | $1.6 | 28.85% |
| ZoomInfo Technologies Inc | 323.67 | 2 | 2.97 | 1.35% | $0.07 | $0.26 | -3.25% |
| Ziff Davis Inc | 41.71 | 1.36 | 1.84 | -2.68% | $0.02 | $0.3 | 3.69% |
| Yelp Inc | 21.86 | 3.19 | 1.86 | 5.21% | $0.06 | $0.33 | 4.41% |
| JOYY Inc | 9.07 | 0.40 | 1.06 | 1.0% | $0.05 | $0.2 | 3.25% |
| Weibo Corp | 6.60 | 0.62 | 1.24 | 3.43% | $0.14 | $0.35 | -0.54% |
| Tripadvisor Inc | 53.04 | 2.04 | 1.13 | 4.33% | $0.1 | $0.48 | -0.19% |
| Hello Group Inc | 6.91 | 0.78 | 0.85 | 3.57% | $0.54 | $1.1 | -14.22% |
| Cars.com Inc | 31.66 | 2.41 | 1.76 | 3.75% | $0.06 | $0.15 | 3.05% |
| Average | 54.28 | 2.52 | 2.77 | 2.89% | $3.72 | $6.23 | 4.79% |
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By carefully studying Meta Platforms, we can deduce the following trends:
With a Price to Earnings ratio of 26.16, which is 0.48x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
The elevated Price to Book ratio of 8.51 relative to the industry average by 3.38x suggests company might be overvalued based on its book value.
The Price to Sales ratio of 9.31, which is 3.36x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The company has a higher Return on Equity (ROE) of 9.77%, which is 6.88% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.06 Billion is 5.93x above the industry average, highlighting stronger profitability and robust cash flow generation.
The gross profit of $33.21 Billion is 5.33x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
The company's revenue growth of 18.87% is notably higher compared to the industry average of 4.79%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage 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.
In terms of the Debt-to-Equity ratio, Meta Platforms stands in comparison with its top 4 peers, leading to the following comparisons:
Compared to its top 4 peers, Meta Platforms has a stronger financial position indicated by its lower debt-to-equity ratio of 0.3.
This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute 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 strong market sentiment and revenue multiples. 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.
