Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Meta Platforms (NASDAQ:META) in comparison to its major competitors within the Interactive Media & Services industry. By analyzing critical 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 | 28.15 | 9.99 | 11.26 | 9.65% | $25.12 | $39.02 | 21.61% |
| Alphabet Inc | 26.60 | 8.32 | 8.27 | 7.96% | $39.19 | $57.39 | 13.79% |
| Reddit Inc | 118.96 | 20.89 | 28.54 | 3.88% | $0.07 | $0.45 | 77.69% |
| Baidu Inc | 12.59 | 1.23 | 2.55 | 2.69% | $8.84 | $14.36 | -3.59% |
| Pinterest Inc | 13.22 | 5.16 | 6.56 | 0.82% | $0.0 | $0.8 | 16.93% |
| Bilibili Inc | 376.39 | 5.82 | 2.88 | 1.53% | $0.28 | $2.68 | 19.76% |
| Trump Media & Technology Group Corp | 188 | 2.08 | 1004.30 | -1.26% | $-0.01 | $0.0 | 5.54% |
| ZoomInfo Technologies Inc | 48.04 | 2.47 | 3.35 | 1.5% | $0.09 | $0.26 | 5.21% |
| CarGurus Inc | 29.42 | 8.38 | 4.19 | 5.34% | $0.06 | $0.2 | 7.01% |
| Weibo Corp | 9.05 | 0.87 | 1.93 | 3.58% | $0.15 | $0.34 | 1.58% |
| Tripadvisor Inc | 38.56 | 3.43 | 1.44 | 5.67% | $0.09 | $0.49 | 6.44% |
| Yelp Inc | 14.57 | 2.68 | 1.49 | 5.98% | $0.07 | $0.33 | 3.75% |
| Ziff Davis Inc | 24.28 | 0.85 | 1.13 | 1.44% | $0.09 | $0.3 | 9.79% |
| FuboTV Inc | 22.16 | 3.50 | 0.95 | -1.98% | $0.01 | $0.08 | -2.81% |
| Hello Group Inc | 11.61 | 0.81 | 0.93 | -1.28% | $0.53 | $1.01 | -2.64% |
| Average | 66.67 | 4.75 | 76.32 | 2.56% | $3.53 | $5.62 | 11.32% |
By conducting an in-depth analysis of Meta Platforms, we can identify the following trends:
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The Price to Earnings ratio of 28.15 is 0.42x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 9.99, which is 2.1x 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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Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 11.26, which is 0.15x the industry average.
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The company has a higher Return on Equity (ROE) of 9.65%, which is 7.09% 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 exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.12 Billion, which is 7.12x above the industry average, implying stronger profitability and robust cash flow generation.
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The company has higher gross profit of $39.02 Billion, which indicates 6.94x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 21.61%, which surpasses the industry average of 11.32%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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 light of the Debt-to-Equity ratio, a comparison between Meta Platforms and its top 4 peers reveals the following information:
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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.
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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 0.25.
Key Takeaways
The low PE ratio of Meta Platforms suggests that the company's stock price is relatively undervalued compared to its earnings. In contrast, the high PB ratio indicates that investors are willing to pay a premium for the company's book value. The low PS ratio implies that Meta Platforms is generating strong revenue relative to its market capitalization. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth highlight the company's strong profitability and growth potential compared to its industry peers in the Interactive Media & Services sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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