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In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Meta Platforms (NASDAQ:META) in relation to its major competitors in the Interactive Media & Services industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 | 26.57 | 9.43 | 10.62 | 9.65% | $25.12 | $39.02 | 21.61% |
| Alphabet Inc | 27.35 | 8.55 | 8.51 | 7.96% | $39.19 | $57.39 | 13.79% |
| Baidu Inc | 11.17 | 1.09 | 2.27 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 90.39 | 15.88 | 21.69 | 3.88% | $0.07 | $0.45 | 77.69% |
| Pinterest Inc | 11.92 | 4.65 | 5.92 | 0.82% | $0.0 | $0.8 | 16.93% |
| Bilibili Inc | 370.51 | 5.74 | 2.84 | 1.53% | $0.81 | $2.68 | 19.76% |
| Trump Media & Technology Group Corp | 177.67 | 1.96 | 949.10 | -1.26% | $-0.01 | $0.0 | 5.54% |
| CarGurus Inc | 28.61 | 8.15 | 4.08 | 5.34% | $0.06 | $0.2 | 7.01% |
| ZoomInfo Technologies Inc | 41.88 | 2.15 | 2.92 | 1.5% | $0.09 | $0.26 | 5.21% |
| Weibo Corp | 8.04 | 0.77 | 1.71 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 15.09 | 2.78 | 1.54 | 5.98% | $0.07 | $0.33 | 3.75% |
| Tripadvisor Inc | 34.54 | 3.07 | 1.29 | 5.67% | $0.09 | $0.49 | 6.44% |
| Ziff Davis Inc | 23.13 | 0.81 | 1.08 | 1.44% | $0.09 | $0.3 | 9.79% |
| FuboTV Inc | 19.21 | 3.04 | 0.83 | -1.98% | $0.01 | $0.08 | -2.81% |
| Yalla Group Ltd | 8.77 | 1.50 | 3.72 | 4.96% | $0.03 | $0.06 | 4.15% |
| Average | 62.02 | 4.3 | 71.96 | 3.01% | $3.54 | $5.55 | 11.8% |
Through a detailed examination of Meta Platforms, we can deduce the following trends:
The Price to Earnings ratio of 26.57 is 0.43x lower than the industry average, indicating potential undervaluation for the stock.
The elevated Price to Book ratio of 9.43 relative to the industry average by 2.19x suggests company might be overvalued based on its book value.
With a relatively low Price to Sales ratio of 10.62, which is 0.15x the industry average, the stock might be considered undervalued based on sales performance.
The company has a higher Return on Equity (ROE) of 9.65%, which is 6.64% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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.
Compared to its industry, the company has higher gross profit of $39.02 Billion, which indicates 7.03x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company's revenue growth of 21.61% is notably higher compared to the industry average of 11.8%, showcasing exceptional sales performance and strong demand for its products or services.
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 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.
For Meta Platforms, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB ratio suggests the market values the company's assets highly. A low PS ratio implies sales are generating strong value. The high ROE, EBITDA, gross profit, and revenue growth highlight the company's strong financial performance within the Interactive Media & Services industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
