In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Meta Platforms META in comparison to its major competitors within the Interactive Media & Services industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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 | 29.12 | 9.47 | 10.36 | 9.77% | $22.06 | $33.21 | 18.87% |
| Alphabet Inc | 25.94 | 7.62 | 7.20 | 8.55% | $35.74 | $51.79 | 15.09% |
| Baidu Inc | 10.87 | 0.81 | 1.56 | 2.98% | $9.27 | $17.16 | -2.58% |
| Pinterest Inc | 95.72 | 7.15 | 6.13 | 1.0% | $-0.0 | $0.71 | 17.71% |
| Kanzhun Ltd | 31.90 | 3.04 | 6.58 | 3.18% | $0.33 | $1.6 | 18.98% |
| ZoomInfo Technologies Inc | 330.33 | 2.04 | 3.03 | 1.35% | $0.07 | $0.26 | -3.25% |
| Yelp Inc | 24.38 | 3.56 | 2.07 | 5.21% | $0.06 | $0.33 | 4.41% |
| JOYY Inc | 12.48 | 0.42 | 1.14 | 1.17% | $0.06 | $0.21 | -1.48% |
| Weibo Corp | 6.46 | 0.64 | 1.39 | 3.78% | $0.14 | $0.37 | 5.05% |
| Ziff Davis Inc | 39.71 | 1.30 | 1.75 | -2.68% | $0.02 | $0.3 | 3.69% |
| Tripadvisor Inc | 58.69 | 2.25 | 1.25 | 4.33% | $0.1 | $0.48 | -0.19% |
| Hello Group Inc | 7.37 | 0.78 | 0.88 | 4.03% | $0.56 | $1.05 | -12.1% |
| Average | 58.53 | 2.69 | 3.0 | 2.99% | $4.21 | $6.75 | 4.12% |
Upon closer analysis of Meta Platforms, the following trends become apparent:
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With a Price to Earnings ratio of 29.12, which is 0.5x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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With a Price to Book ratio of 9.47, which is 3.52x 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.
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The Price to Sales ratio of 10.36, which is 3.45x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The company has a higher Return on Equity (ROE) of 9.77%, which is 6.78% 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 5.24x above the industry average, indicating stronger profitability and robust cash flow generation.
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The company has higher gross profit of $33.21 Billion, which indicates 4.92x 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 4.12%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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:
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Compared to its top 4 peers, Meta Platforms has a stronger financial position indicated by its lower debt-to-equity ratio of 0.3.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
The PE, PB, and PS ratios for Meta Platforms indicate that it may be overvalued compared to its peers in the Interactive Media & Services industry. However, its high ROE, EBITDA, gross profit, and revenue growth suggest strong financial performance relative to industry standards. This combination of high valuation multiples and strong operational metrics positions Meta Platforms as a competitive player in the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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