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In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Meta Platforms (NASDAQ:META) in relation to its major competitors in the Interactive Media & Services industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight company's performance in 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 | 26.64 | 7.82 | 8.22 | 1.39% | $26.85 | $42.04 | 26.25% |
| Alphabet Inc | 28.14 | 8.89 | 9.06 | 9.33% | $49.74 | $60.98 | 15.95% |
| Baidu Inc | 10.40 | 1.01 | 2.11 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 86.43 | 13.61 | 19.27 | 6.51% | $0.14 | $0.53 | 67.91% |
| Pinterest Inc | 8.95 | 3.57 | 4.34 | 1.91% | $0.07 | $0.84 | 16.79% |
| Bilibili Inc | 103.03 | 5.15 | 2.70 | 3.24% | $0.5 | $2.82 | 5.2% |
| CarGurus Inc | 23.62 | 8.89 | 3.92 | 11.03% | $0.06 | $0.21 | 3.17% |
| ZoomInfo Technologies Inc | 31.03 | 1.96 | 2.58 | 2.51% | $0.09 | $0.27 | 4.74% |
| Weibo Corp | 7.06 | 0.68 | 1.51 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 12.28 | 2.31 | 1.25 | 5.32% | $0.07 | $0.34 | 4.36% |
| Tripadvisor Inc | 23.97 | 2.38 | 1.04 | 7.95% | $0.1 | $0.51 | 3.95% |
| Ziff Davis Inc | 11.60 | 0.65 | 0.86 | -0.2% | $0.07 | $0.31 | 2.87% |
| FuboTV Inc | 10.50 | 2.86 | 0.81 | -4.64% | $-0.01 | $0.08 | -2.33% |
| Taboola.com Ltd | 48.94 | 1.24 | 0.68 | 0.57% | $0.03 | $0.14 | 14.72% |
| Hello Group Inc | 10.25 | 0.72 | 0.82 | -1.28% | $0.53 | $1.01 | -2.64% |
| Average | 29.73 | 3.85 | 3.64 | 3.47% | $4.31 | $5.91 | 9.48% |
When analyzing Meta Platforms, the following trends become evident:
A Price to Earnings ratio of 26.64 significantly below the industry average by 0.9x suggests undervaluation. This can make the stock appealing for those seeking growth.
With a Price to Book ratio of 7.82, which is 2.03x the industry average, Meta Platforms might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
With a relatively high Price to Sales ratio of 8.22, which is 2.26x the industry average, the stock might be considered overvalued based on sales performance.
The Return on Equity (ROE) of 1.39% is 2.08% below the industry average, suggesting 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 6.23x above the industry average, indicating stronger profitability and robust cash flow generation.
The company has higher gross profit of $42.04 Billion, which indicates 7.11x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company's revenue growth of 26.25% is notably higher compared to the industry average of 9.48%, showcasing exceptional sales performance and strong demand for its products or services.
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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 considering the Debt-to-Equity ratio, Meta Platforms can be compared to its top 4 peers, leading to the following observations:
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 0.26.
In comparison to its peers in the Interactive Media & Services industry, Meta Platforms has a low PE ratio, indicating potential undervaluation. However, its high PB and PS ratios suggest overvaluation relative to industry standards. On the other hand, Meta Platforms exhibits low ROE but high EBITDA, gross profit, and revenue growth, indicating strong operational performance and growth potential within the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
