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In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Meta Platforms (NASDAQ:META) against its key competitors in the Interactive Media & Services industry. By analyzing important 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 | 27.51 | 8.07 | 8.49 | 1.39% | $26.85 | $42.04 | 26.25% |
| Alphabet Inc | 27.53 | 8.70 | 8.87 | 9.33% | $49.74 | $60.98 | 15.95% |
| Baidu Inc | 11.52 | 1.12 | 2.34 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 89.67 | 14.12 | 19.99 | 6.51% | $0.14 | $0.53 | 67.91% |
| Pinterest Inc | 9.51 | 3.79 | 4.61 | 1.91% | $0.07 | $0.84 | 16.79% |
| Bilibili Inc | 374.40 | 5.80 | 2.87 | 1.53% | $0.81 | $2.68 | 19.76% |
| Trump Media & Technology Group Corp | 145.56 | 1.61 | 777.56 | -1.26% | $-0.01 | $0.0 | 5.54% |
| ZoomInfo Technologies Inc | 34.10 | 2.15 | 2.83 | 2.51% | $0.09 | $0.27 | 4.74% |
| CarGurus Inc | 22.53 | 8.48 | 3.74 | 11.03% | $0.06 | $0.21 | 3.17% |
| Weibo Corp | 7.40 | 0.71 | 1.58 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 12.91 | 2.49 | 1.32 | 5.32% | $0.07 | $0.33 | 1.52% |
| Tripadvisor Inc | 25.70 | 2.55 | 1.12 | 7.95% | $0.1 | $0.51 | 3.95% |
| Ziff Davis Inc | 20.63 | 0.73 | 0.96 | 1.44% | $0.09 | $0.3 | 9.79% |
| FuboTV Inc | 12.12 | 3.31 | 0.93 | -4.64% | $-0.01 | $0.08 | -2.33% |
| Yalla Group Ltd | 8.89 | 1.53 | 3.77 | 4.96% | $0.03 | $0.06 | 4.15% |
| Average | 57.32 | 4.08 | 59.46 | 3.78% | $4.3 | $5.82 | 10.64% |
After examining Meta Platforms, the following trends can be inferred:
A Price to Earnings ratio of 27.51 significantly below the industry average by 0.48x suggests undervaluation. This can make the stock appealing for those seeking growth.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 8.07 which exceeds the industry average by 1.98x.
The Price to Sales ratio is 8.49, which is 0.14x the industry average. This suggests a possible undervaluation based on sales performance.
With a Return on Equity (ROE) of 1.39% that is 2.39% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $26.85 Billion, which is 6.24x above the industry average, indicating stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $42.04 Billion, which indicates 7.22x above the industry average, indicating stronger profitability and higher earnings from its core operations.
With a revenue growth of 26.25%, which surpasses the industry average of 10.64%, the company is demonstrating robust sales expansion and gaining market share.
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.
In terms of the Debt-to-Equity ratio, Meta Platforms stands in comparison with its top 4 peers, leading to the following comparisons:
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 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 low ROE suggests that the company is not efficiently utilizing its shareholders' equity. The high EBITDA and gross profit indicate strong operational performance, while the high revenue growth reflects the company's ability to expand its top line rapidly within the Interactive Media & Services industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
