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In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Meta Platforms (NASDAQ:META) alongside its primary competitors in the Interactive Media & Services industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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 | 25.84 | 9.17 | 10.33 | 9.65% | $25.12 | $39.02 | 21.61% |
| Alphabet Inc | 26.81 | 8.38 | 8.34 | 7.96% | $39.19 | $57.39 | 13.79% |
| Baidu Inc | 11.08 | 1.08 | 2.25 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 88.83 | 15.60 | 21.31 | 3.88% | $0.07 | $0.45 | 77.69% |
| Pinterest Inc | 11.81 | 4.60 | 5.86 | 0.82% | $0.0 | $0.8 | 16.93% |
| Bilibili Inc | 367.62 | 5.69 | 2.81 | 1.53% | $0.81 | $2.68 | 19.76% |
| Trump Media & Technology Group Corp | 175.33 | 1.94 | 936.64 | -1.26% | $-0.01 | $0.0 | 5.54% |
| CarGurus Inc | 28.20 | 8.03 | 4.02 | 5.34% | $0.06 | $0.2 | 7.01% |
| ZoomInfo Technologies Inc | 40.66 | 2.09 | 2.83 | 1.5% | $0.09 | $0.26 | 5.21% |
| Weibo Corp | 7.95 | 0.76 | 1.70 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 14.98 | 2.76 | 1.53 | 5.98% | $0.07 | $0.33 | 3.75% |
| Tripadvisor Inc | 32.29 | 2.87 | 1.20 | 5.67% | $0.09 | $0.49 | 6.44% |
| Ziff Davis Inc | 23.08 | 0.81 | 1.08 | 1.44% | $0.09 | $0.3 | 9.79% |
| FuboTV Inc | 19.37 | 3.06 | 0.83 | -1.98% | $0.01 | $0.08 | -2.81% |
| Yalla Group Ltd | 8.62 | 1.48 | 3.65 | 4.96% | $0.03 | $0.06 | 4.15% |
| Average | 61.19 | 4.22 | 71.0 | 3.01% | $3.54 | $5.55 | 11.8% |
When conducting a detailed analysis of Meta Platforms, the following trends become clear:
The Price to Earnings ratio of 25.84 is 0.42x lower than the industry average, indicating potential undervaluation for the stock.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 9.17 which exceeds the industry average by 2.17x.
With a relatively low Price to Sales ratio of 10.33, which is 0.15x the industry average, the stock might be considered undervalued 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.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.12 Billion is 7.1x above the industry average, highlighting stronger profitability and robust cash flow generation.
With higher gross profit of $39.02 Billion, which indicates 7.03x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of 21.61%, which surpasses the industry average of 11.8%, the company is demonstrating robust sales expansion and gaining market share.
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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 examining Meta Platforms in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
Meta Platforms demonstrates a stronger financial position compared to its top 4 peers in the sector.
With a lower debt-to-equity ratio of 0.25, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
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
