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 Platforms Background
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 | 27.98 | 9.10 | 9.95 | 9.77% | $22.06 | $33.21 | 18.87% |
| Alphabet Inc | 22.74 | 6.68 | 6.31 | 8.55% | $35.74 | $51.79 | 15.09% |
| Baidu Inc | 11.40 | 0.85 | 1.64 | 2.98% | $9.27 | $17.16 | -2.58% |
| Pinterest Inc | 95.09 | 7.11 | 6.09 | 1.0% | $-0.0 | $0.71 | 17.71% |
| Kanzhun Ltd | 32.29 | 3.04 | 6.77 | 2.92% | $0.36 | $1.6 | 28.85% |
| ZoomInfo Technologies Inc | 378.67 | 2.34 | 3.47 | 1.35% | $0.07 | $0.26 | -3.25% |
| Ziff Davis Inc | 44.77 | 1.46 | 1.97 | -2.68% | $0.02 | $0.3 | 3.69% |
| Yelp Inc | 23.51 | 3.43 | 2 | 5.21% | $0.06 | $0.33 | 4.41% |
| JOYY Inc | 13.07 | 0.44 | 1.20 | 1.17% | $0.06 | $0.21 | -1.48% |
| Weibo Corp | 6.68 | 0.66 | 1.44 | 3.78% | $0.14 | $0.37 | 5.05% |
| Tripadvisor Inc | 55.54 | 2.13 | 1.18 | 4.33% | $0.1 | $0.48 | -0.19% |
| Cars.com Inc | 33.81 | 2.57 | 1.88 | 3.75% | $0.06 | $0.15 | 3.05% |
| Average | 65.23 | 2.79 | 3.09 | 2.94% | $4.17 | $6.67 | 6.4% |
By closely examining Meta Platforms, we can identify the following trends:
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A Price to Earnings ratio of 27.98 significantly below the industry average by 0.43x suggests undervaluation. This can make the stock appealing for those seeking growth.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 9.1 which exceeds the industry average by 3.26x.
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The stock's relatively high Price to Sales ratio of 9.95, surpassing the industry average by 3.22x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a higher Return on Equity (ROE) of 9.77%, which is 6.83% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.06 Billion, which is 5.29x above the industry average, indicating stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $33.21 Billion, which indicates 4.98x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 18.87%, which surpasses the industry average of 6.4%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 comparing Meta Platforms with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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When considering the debt-to-equity ratio, Meta Platforms exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.3, which can be perceived as a positive aspect by investors.
Key Takeaways
For Meta Platforms, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest the market values the company's assets and sales highly. In terms of ROE, EBITDA, gross profit, and revenue growth, Meta Platforms outperforms its industry peers, reflecting strong financial performance and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
