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In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess 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 | 26.95 | 7.91 | 8.31 | 1.39% | $26.85 | $42.04 | 26.25% |
| Alphabet Inc | 28.30 | 8.94 | 9.12 | 9.33% | $49.74 | $60.98 | 15.95% |
| Baidu Inc | 11.78 | 1.15 | 2.39 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 93.47 | 14.72 | 20.84 | 6.51% | $0.14 | $0.53 | 67.91% |
| Pinterest Inc | 9.59 | 3.83 | 4.65 | 1.91% | $0.07 | $0.84 | 16.79% |
| Bilibili Inc | 365.40 | 5.66 | 2.80 | 1.53% | $0.81 | $2.68 | 19.76% |
| CarGurus Inc | 24.09 | 9.06 | 4 | 11.03% | $0.06 | $0.21 | 3.17% |
| ZoomInfo Technologies Inc | 33.68 | 2.13 | 2.80 | 2.51% | $0.09 | $0.27 | 4.74% |
| Weibo Corp | 7.50 | 0.72 | 1.60 | 3.58% | $0.15 | $0.34 | 1.58% |
| Tripadvisor Inc | 26.42 | 2.62 | 1.15 | 7.95% | $0.1 | $0.51 | 3.95% |
| Yelp Inc | 13.27 | 2.49 | 1.35 | 5.32% | $0.07 | $0.34 | 4.36% |
| FuboTV Inc | 12.28 | 3.35 | 0.94 | -4.64% | $-0.01 | $0.08 | -2.33% |
| Ziff Davis Inc | 12.46 | 0.70 | 0.92 | -0.2% | $0.07 | $0.31 | 2.87% |
| Taboola.com Ltd | 52.12 | 1.32 | 0.72 | 0.57% | $0.03 | $0.14 | 14.72% |
| Average | 53.1 | 4.36 | 4.1 | 3.7% | $4.63 | $6.28 | 11.53% |
By closely examining Meta Platforms, we can identify the following trends:
At 26.95, the stock's Price to Earnings ratio is 0.51x less than the industry average, suggesting favorable growth potential.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 7.91 which exceeds the industry average by 1.81x.
The Price to Sales ratio of 8.31, which is 2.03x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 1.39% is 2.31% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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 6.69x 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 11.53%, the company is demonstrating robust sales expansion and gaining market share.
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.
In terms of the Debt-to-Equity ratio, Meta Platforms can be assessed by comparing it to its top 4 peers, resulting in the following observations:
Meta Platforms is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.26.
This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
For Meta Platforms, the PE ratio is low compared to peers, indicating potential undervaluation. However, the PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, the company shows lower profitability, while EBITDA, gross profit, and revenue growth are all high, reflecting strong operational performance within the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
