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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 | 29.49 | 8.66 | 9.10 | 1.39% | $25.12 | $39.02 | 7.84% |
| Alphabet Inc | 27.79 | 8.78 | 8.95 | 9.33% | $39.19 | $57.39 | 6.14% |
| Baidu Inc | 11.10 | 1.08 | 2.25 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 86.79 | 15.24 | 20.83 | 3.88% | $0.07 | $0.45 | 77.69% |
| Pinterest Inc | 11.78 | 4.59 | 5.85 | 0.82% | $0.0 | $0.8 | 16.93% |
| Bilibili Inc | 407.09 | 6.30 | 3.12 | 1.53% | $0.81 | $2.68 | 19.76% |
| Trump Media & Technology Group Corp | 170.33 | 1.88 | 909.93 | -1.26% | $-0.01 | $0.0 | 5.54% |
| ZoomInfo Technologies Inc | 43.60 | 2.24 | 3.04 | 1.5% | $0.09 | $0.26 | 5.21% |
| CarGurus Inc | 27.32 | 7.78 | 3.89 | 5.34% | $0.06 | $0.2 | 7.01% |
| Weibo Corp | 7.76 | 0.74 | 1.66 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 14.77 | 2.72 | 1.51 | 5.98% | $0.07 | $0.33 | 3.75% |
| Tripadvisor Inc | 33.75 | 3 | 1.26 | 5.67% | $0.09 | $0.49 | 6.44% |
| Ziff Davis Inc | 21.45 | 0.75 | 1 | 1.44% | $0.09 | $0.3 | 9.79% |
| FuboTV Inc | 19.26 | 3.04 | 0.83 | -1.98% | $0.01 | $0.08 | -2.81% |
| Taboola.com Ltd | 87.12 | 1.12 | 0.64 | -0.45% | $0.02 | $0.14 | 8.71% |
| Average | 69.28 | 4.23 | 68.91 | 2.72% | $3.53 | $5.56 | 11.58% |
By closely studying Meta Platforms, we can observe the following trends:
A Price to Earnings ratio of 29.49 significantly below the industry average by 0.43x suggests undervaluation. This can make the stock appealing for those seeking growth.
The elevated Price to Book ratio of 8.66 relative to the industry average by 2.05x suggests company might be overvalued based on its book value.
Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 9.1, which is 0.13x the industry average.
The Return on Equity (ROE) of 1.39% is 1.33% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.12 Billion, which is 7.12x above the industry average, implying stronger profitability and robust cash flow generation.
With higher gross profit of $39.02 Billion, which indicates 7.02x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
The company is witnessing a substantial decline in revenue growth, with a rate of 7.84% compared to the industry average of 11.58%, which indicates a challenging sales environment.
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage 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.
When evaluating Meta Platforms alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
When comparing the debt-to-equity ratio, Meta Platforms is in a stronger financial position compared to its top 4 peers.
The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.26.
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 not fully reflected in the stock price. In terms of ROE, Meta Platforms lags behind peers, indicating lower profitability. The high EBITDA and gross profit signify strong operational performance. However, the low revenue growth suggests slower expansion compared to 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
