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In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Meta Platforms (NASDAQ:META) against its key competitors in the Interactive Media & Services industry. By examining key 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 world's largest online social network, with nearly 4 billion family of apps monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. The firm's ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the firm's total revenue, with more than 45% coming from the US and Canada and over 20% from Europe.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Meta Platforms Inc | 25.47 | 8.03 | 8.76 | 8.17% | $18.48 | $31.76 | 27.26% |
| Alphabet Inc | 24.50 | 6.99 | 6.54 | 7.96% | $31.33 | $49.23 | 13.59% |
| Baidu Inc | 11.59 | 0.89 | 1.64 | 2.22% | $7.5 | $16.22 | 1.18% |
| Pinterest Inc | 107.72 | 6.70 | 6.33 | 0.28% | $-0.02 | $0.67 | 20.57% |
| Kanzhun Ltd | 33.73 | 3.08 | 6.92 | 1.78% | $0.1 | $1.41 | 33.36% |
| ZoomInfo Technologies Inc | 55.15 | 2.06 | 3.46 | 0.73% | $0.06 | $0.27 | 3.13% |
| CarGurus Inc | 83.07 | 4.42 | 3.01 | 3.59% | $0.03 | $0.17 | -6.97% |
| Yelp Inc | 22.69 | 3.33 | 1.95 | 1.92% | $0.03 | $0.31 | 6.5% |
| Tripadvisor Inc | 105.31 | 2.84 | 1.34 | -6.96% | $0.02 | $0.36 | 6.47% |
| Ziff Davis Inc | 35.20 | 1.09 | 1.52 | 0.56% | $0.07 | $0.27 | 2.39% |
| JOYY Inc | 6.43 | 0.38 | 1.02 | 0.87% | $0.05 | $0.2 | -3.27% |
| Weibo Corp | 6.33 | 0.58 | 1.08 | 1.5% | $0.09 | $0.31 | -4.42% |
| Getty Images Holdings Inc | 52 | 2.32 | 1.66 | 2.11% | $0.07 | $0.16 | -5.67% |
| Shutterstock Inc | 15.65 | 2.68 | 1.68 | 3.02% | $0.04 | $0.13 | -0.45% |
| Cars.com Inc | 12.54 | 2.72 | 1.92 | 0.16% | $0.04 | $0.15 | 7.85% |
| Average | 40.85 | 2.86 | 2.86 | 1.41% | $2.82 | $4.99 | 5.3% |
Upon closer analysis of Meta Platforms, the following trends become apparent:
With a Price to Earnings ratio of 25.47, which is 0.62x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
With a Price to Book ratio of 8.03, which is 2.81x the industry average, Meta Platforms might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
With a relatively high Price to Sales ratio of 8.76, which is 3.06x the industry average, the stock might be considered overvalued based on sales performance.
The company has a higher Return on Equity (ROE) of 8.17%, which is 6.76% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $18.48 Billion, which is 6.55x above the industry average, indicating stronger profitability and robust cash flow generation.
The company has higher gross profit of $31.76 Billion, which indicates 6.36x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company is experiencing remarkable revenue growth, with a rate of 27.26%, outperforming the industry average of 5.3%.
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.
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.
When comparing Meta Platforms with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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 PE, PB, and PS ratios for Meta Platforms indicate that it may be overvalued compared to its peers in the Interactive Media & Services industry. However, its high ROE, EBITDA, gross profit, and revenue growth suggest strong financial performance relative to industry competitors. This combination of high valuation multiples and strong operational metrics positions Meta Platforms as a key player in the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
