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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 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 | 27.48 | 8.67 | 9.46 | 8.79% | $18.87 | $31.76 | 22.1% |
| Alphabet Inc | 23.14 | 6.60 | 6.18 | 7.96% | $31.33 | $49.23 | 13.59% |
| Baidu Inc | 11.40 | 0.87 | 1.62 | 2.22% | $7.5 | $16.22 | 1.18% |
| Pinterest Inc | 105.76 | 6.58 | 6.21 | 0.28% | $-0.02 | $0.67 | 20.57% |
| Kanzhun Ltd | 34.79 | 3.16 | 7.14 | 1.78% | $0.1 | $1.41 | 33.36% |
| ZoomInfo Technologies Inc | 230 | 1.80 | 2.87 | -1.26% | $0.01 | $0.25 | -5.54% |
| Yelp Inc | 18.05 | 3.10 | 1.82 | 5.22% | $0.05 | $0.33 | 5.9% |
| JOYY Inc | 6.76 | 0.40 | 1.08 | 0.87% | $0.05 | $0.2 | -3.27% |
| Tripadvisor Inc | 82.88 | 2.28 | 1.12 | 2.85% | $0.07 | $0.45 | 0.61% |
| Ziff Davis Inc | 25.14 | 1.03 | 1.53 | 1.96% | $0.09 | $0.27 | -1.6% |
| Weibo Corp | 6.60 | 0.60 | 1.12 | 1.5% | $0.09 | $0.31 | -4.42% |
| Getty Images Holdings Inc | 35.63 | 2.09 | 1.54 | 0.59% | $0.07 | $0.17 | 1.54% |
| Vtex | 432.94 | 5.43 | 6.30 | 2.0% | $0.01 | $0.04 | 18.07% |
| Shutterstock Inc | 28.05 | 2.50 | 1.50 | 0.68% | $0.04 | $0.13 | 5.37% |
| Average | 80.09 | 2.8 | 3.08 | 2.05% | $3.03 | $5.36 | 6.57% |
By analyzing Meta Platforms, we can infer the following trends:
The Price to Earnings ratio of 27.48 is 0.34x lower than the industry average, indicating potential undervaluation for the stock.
With a Price to Book ratio of 8.67, which is 3.1x 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 9.46, which is 3.07x the industry average, the stock might be considered overvalued based on sales performance.
The Return on Equity (ROE) of 8.79% is 6.74% above the industry average, highlighting efficient use of equity to generate profits.
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $18.87 Billion, which is 6.23x above the industry average, indicating stronger profitability and robust cash flow generation.
The gross profit of $31.76 Billion is 5.93x 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 22.1%, outperforming the industry average of 6.57%.
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 analyzing Meta Platforms in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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 0.24.
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.
Posted In: META
