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In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Meta Platforms (NASDAQ:META) against its key competitors in the Interactive Media & Services industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
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 | 25.71 | 9.13 | 10.28 | 9.65% | $25.12 | $39.02 | 21.61% |
| Alphabet Inc | 26.17 | 8.18 | 8.14 | 7.96% | $39.19 | $57.39 | 13.79% |
| Baidu Inc | 10.97 | 1.07 | 2.23 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 87.66 | 15.40 | 21.03 | 3.88% | $0.07 | $0.45 | 77.69% |
| Pinterest Inc | 12 | 4.68 | 5.96 | 0.82% | $0.0 | $0.8 | 16.93% |
| Bilibili Inc | 353.72 | 5.48 | 2.71 | 1.53% | $0.81 | $2.68 | 19.76% |
| Trump Media & Technology Group Corp | 180.89 | 2 | 966.32 | -1.26% | $-0.01 | $0.0 | 5.54% |
| CarGurus Inc | 27.99 | 7.98 | 3.99 | 5.34% | $0.06 | $0.2 | 7.01% |
| ZoomInfo Technologies Inc | 41.04 | 2.11 | 2.86 | 1.5% | $0.09 | $0.26 | 5.21% |
| Weibo Corp | 8 | 0.77 | 1.71 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 15.46 | 2.85 | 1.58 | 5.98% | $0.07 | $0.33 | 3.75% |
| Tripadvisor Inc | 32.75 | 2.91 | 1.22 | 5.67% | $0.09 | $0.49 | 6.44% |
| Ziff Davis Inc | 23.46 | 0.82 | 1.09 | 1.44% | $0.09 | $0.3 | 9.79% |
| FuboTV Inc | 20.16 | 3.19 | 0.87 | -1.98% | $0.01 | $0.08 | -2.81% |
| Yalla Group Ltd | 8.69 | 1.49 | 3.68 | 4.96% | $0.03 | $0.06 | 4.15% |
| Average | 60.64 | 4.21 | 73.1 | 3.01% | $3.54 | $5.55 | 11.8% |
When closely examining Meta Platforms, the following trends emerge:
A Price to Earnings ratio of 25.71 significantly below the industry average by 0.42x suggests undervaluation. This can make the stock appealing for those seeking growth.
The elevated Price to Book ratio of 9.13 relative to the industry average by 2.17x suggests company might be overvalued based on its book value.
The Price to Sales ratio is 10.28, which is 0.14x the industry average. This suggests a possible undervaluation based on sales performance.
With a Return on Equity (ROE) of 9.65% that is 6.64% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.12 Billion, which is 7.1x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
The gross profit of $39.02 Billion is 7.03x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
The company is experiencing remarkable revenue growth, with a rate of 21.61%, outperforming the industry average of 11.8%.
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:
In terms of the debt-to-equity ratio, Meta Platforms has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.25.
The low PE ratio of Meta Platforms suggests that the company's stock price is relatively undervalued compared to its earnings. In contrast, the high PB ratio indicates that investors are willing to pay a premium for the company's book value. The low PS ratio implies that Meta Platforms is generating strong revenue relative to its market capitalization. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth highlight the company's strong profitability and growth potential compared to its industry peers in the Interactive Media & Services sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
