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In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. 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 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 | 27.95 | 8.21 | 8.62 | 1.39% | $26.85 | $42.04 | 26.25% |
| Alphabet Inc | 28.64 | 9.05 | 9.23 | 9.33% | $49.74 | $60.98 | 15.95% |
| Baidu Inc | 12.09 | 1.18 | 2.45 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 94.10 | 14.82 | 20.98 | 6.51% | $0.14 | $0.53 | 67.91% |
| Pinterest Inc | 9.48 | 3.78 | 4.60 | 1.91% | $0.07 | $0.84 | 16.79% |
| Bilibili Inc | 370.72 | 5.74 | 2.84 | 1.53% | $0.81 | $2.68 | 19.76% |
| CarGurus Inc | 23.93 | 9.01 | 3.97 | 11.03% | $0.06 | $0.21 | 3.17% |
| ZoomInfo Technologies Inc | 34.10 | 2.15 | 2.83 | 2.51% | $0.09 | $0.27 | 4.74% |
| Weibo Corp | 7.66 | 0.74 | 1.63 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 13.04 | 2.45 | 1.33 | 5.32% | $0.07 | $0.34 | 4.36% |
| Tripadvisor Inc | 25.55 | 2.53 | 1.11 | 7.95% | $0.1 | $0.51 | 3.95% |
| FuboTV Inc | 12.31 | 3.36 | 0.94 | -4.64% | $-0.01 | $0.08 | -2.33% |
| Ziff Davis Inc | 12.54 | 0.71 | 0.93 | -0.2% | $0.07 | $0.31 | 2.87% |
| Yalla Group Ltd | 9.44 | 1.62 | 4 | 4.96% | $0.03 | $0.06 | 4.15% |
| Average | 50.28 | 4.4 | 4.37 | 4.04% | $4.63 | $6.27 | 10.72% |
Through a meticulous analysis of Meta Platforms, we can observe the following trends:
At 27.95, the stock's Price to Earnings ratio is 0.56x less than the industry average, suggesting favorable growth potential.
The elevated Price to Book ratio of 8.21 relative to the industry average by 1.87x suggests company might be overvalued based on its book value.
The Price to Sales ratio of 8.62, which is 1.97x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The company has a lower Return on Equity (ROE) of 1.39%, which is 2.65% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $26.85 Billion, which is 5.8x above the industry average, indicating stronger profitability and robust cash flow generation.
The company has higher gross profit of $42.04 Billion, which indicates 6.7x 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 26.25%, outperforming the industry average of 10.72%.
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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.
By evaluating Meta Platforms against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
Meta Platforms exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.26.
This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.
The low PE ratio suggests Meta Platforms may be undervalued compared to its peers in the Interactive Media & Services industry. However, the high PB and PS ratios indicate that the market values the company's assets and sales more highly. In terms of profitability, Meta Platforms shows low ROE, but high EBITDA and gross profit margins, indicating strong operational performance. Additionally, the high revenue growth rate suggests potential for future expansion and market dominance within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
