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In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Meta Platforms (NASDAQ:META) vis-à-vis its key competitors in the Interactive Media & Services industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in 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 | 28.14 | 8.26 | 8.68 | 1.39% | $26.85 | $42.04 | 26.25% |
| Alphabet Inc | 28.07 | 8.87 | 9.04 | 9.33% | $49.74 | $60.98 | 15.95% |
| Baidu Inc | 11.29 | 1.10 | 2.29 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 90.45 | 14.25 | 20.16 | 6.51% | $0.14 | $0.53 | 67.91% |
| Pinterest Inc | 9.04 | 3.61 | 4.38 | 1.91% | $0.07 | $0.84 | 16.79% |
| Bilibili Inc | 385.29 | 5.96 | 2.95 | 1.53% | $0.81 | $2.68 | 19.76% |
| Trump Media & Technology Group Corp | 157.44 | 1.74 | 841.08 | -1.26% | $-0.01 | $0.0 | 5.54% |
| ZoomInfo Technologies Inc | 36.19 | 2.28 | 3 | 2.51% | $0.09 | $0.27 | 4.74% |
| CarGurus Inc | 27.24 | 7.76 | 3.88 | 5.34% | $0.06 | $0.2 | 7.01% |
| Weibo Corp | 7.52 | 0.72 | 1.60 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 14.75 | 2.72 | 1.51 | 5.98% | $0.07 | $0.33 | 3.75% |
| Tripadvisor Inc | 32.15 | 2.86 | 1.20 | 5.67% | $0.09 | $0.49 | 6.44% |
| FuboTV Inc | 12.75 | 3.48 | 0.98 | -4.64% | $-0.01 | $0.08 | -2.33% |
| Ziff Davis Inc | 21.13 | 0.74 | 0.98 | 1.44% | $0.09 | $0.3 | 9.79% |
| Yalla Group Ltd | 9.15 | 1.57 | 3.88 | 4.96% | $0.03 | $0.06 | 4.15% |
| Average | 60.18 | 4.12 | 64.07 | 3.25% | $4.3 | $5.82 | 11.25% |
By conducting a comprehensive analysis of Meta Platforms, the following trends become evident:
The Price to Earnings ratio of 28.14 is 0.47x lower than the industry average, indicating potential undervaluation for the stock.
The elevated Price to Book ratio of 8.26 relative to the industry average by 2.0x suggests company might be overvalued based on its book value.
The Price to Sales ratio is 8.68, which is 0.14x the industry average. This suggests a possible undervaluation based on sales performance.
The company has a lower Return on Equity (ROE) of 1.39%, which is 1.86% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $26.85 Billion is 6.24x above the industry average, highlighting stronger profitability and robust cash flow generation.
The gross profit of $42.04 Billion is 7.22x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
With a revenue growth of 26.25%, which surpasses the industry average of 11.25%, the company is demonstrating robust sales expansion and gaining market share.
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:
When comparing the debt-to-equity ratio, Meta Platforms is in a stronger financial position compared to its top 4 peers.
The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.26.
For Meta Platforms, the low PE ratio suggests potential undervaluation compared to peers in the Interactive Media & Services industry. The high PB ratio indicates a premium placed on the company's assets. A low PS ratio implies a favorable valuation based on revenue. In terms of ROE, the company shows lower profitability compared to industry peers. The high EBITDA and gross profit signify strong operational performance, while high revenue growth indicates a positive outlook for future earnings.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
