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In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. 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 | 26.07 | 7.65 | 8.04 | 1.39% | $26.85 | $42.04 | 26.25% |
| Alphabet Inc | 28.57 | 9.03 | 9.21 | 9.33% | $49.74 | $60.98 | 15.95% |
| Baidu Inc | 10.08 | 1.02 | 2.04 | 2.69% | $8.84 | $14.36 | -3.59% |
| Reddit Inc | 83.82 | 13.20 | 18.69 | 6.51% | $0.14 | $0.53 | 67.91% |
| Pinterest Inc | 8.71 | 3.47 | 4.22 | 1.91% | $0.07 | $0.84 | 16.79% |
| Bilibili Inc | 95.41 | 4.77 | 2.50 | 3.24% | $0.5 | $2.82 | 5.2% |
| CarGurus Inc | 22.93 | 8.63 | 3.81 | 11.03% | $0.06 | $0.21 | 3.17% |
| ZoomInfo Technologies Inc | 29.29 | 1.85 | 2.43 | 2.51% | $0.09 | $0.27 | 4.74% |
| Weibo Corp | 5.45 | 0.61 | 1.47 | 3.58% | $0.15 | $0.34 | 1.58% |
| Yelp Inc | 12.88 | 2.42 | 1.31 | 5.32% | $0.07 | $0.34 | 4.36% |
| Tripadvisor Inc | 22.27 | 2.21 | 0.97 | 7.95% | $0.1 | $0.51 | 3.95% |
| Ziff Davis Inc | 11.49 | 0.65 | 0.85 | -0.2% | $0.07 | $0.31 | 2.87% |
| Taboola.com Ltd | 49.19 | 1.24 | 0.68 | 0.57% | $0.03 | $0.14 | 14.72% |
| Hello Group Inc | 10.43 | 0.73 | 0.83 | -1.28% | $0.53 | $1.01 | -2.64% |
| Average | 30.04 | 3.83 | 3.77 | 4.09% | $4.65 | $6.36 | 10.39% |
When conducting a detailed analysis of Meta Platforms, the following trends become clear:
With a Price to Earnings ratio of 26.07, which is 0.87x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
The elevated Price to Book ratio of 7.65 relative to the industry average by 2.0x suggests company might be overvalued based on its book value.
The stock's relatively high Price to Sales ratio of 8.04, surpassing the industry average by 2.13x, may indicate an aspect of overvaluation in terms of sales performance.
The company has a lower Return on Equity (ROE) of 1.39%, which is 2.7% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $26.85 Billion, which is 5.77x above the industry average, indicating stronger profitability and robust cash flow generation.
With higher gross profit of $42.04 Billion, which indicates 6.61x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of 26.25%, which surpasses the industry average of 10.39%, the company is demonstrating robust sales expansion and gaining market share.
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared 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:
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.
For Meta Platforms, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, Meta Platforms shows lower profitability compared to peers. However, its high EBITDA, gross profit, and revenue growth indicate strong operational performance within the Interactive Media & Services industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: META
