Assessing Meta Platforms's Performance Against Competitors In Interactive Media & Services Industry
In the dynamic 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 (NASDAQ:META) and its primary competitors in the Interactive Media & Services industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 | 26.70 | 9.28 | 10.44 | 9.05% | $22.52 | $34.74 | 16.07% |
| Alphabet Inc | 19.49 | 6.14 | 5.95 | 10.3% | $46.31 | $53.87 | 12.04% |
| Baidu Inc | 8.52 | 0.79 | 1.61 | 2.89% | $9.8 | $14.96 | 2.98% |
| Pinterest Inc | 12.44 | 4.88 | 6.31 | 0.19% | $-0.03 | $0.66 | 15.54% |
| Reddit Inc | 23.68 | 9.84 | 14.53 | 1.2% | $0.01 | $0.36 | 61.49% |
| Kanzhun Ltd | 30.97 | 3.55 | 7.60 | 3.38% | $0.44 | $1.61 | 12.88% |
| Trump Media & Technology Group Corp | 17.59 | 6.07 | 1075.01 | -3.51% | $-0.03 | $0.0 | 6.58% |
| ZoomInfo Technologies Inc | 80.50 | 1.93 | 2.81 | 1.6% | $0.07 | $0.26 | -1.42% |
| CarGurus Inc | 83.19 | 7.57 | 3.59 | 8.27% | $0.05 | $0.2 | 4.34% |
| Weibo Corp | 6.92 | 0.68 | 1.45 | 3.09% | $0.11 | $0.31 | 0.34% |
| Yelp Inc | 17.36 | 3.11 | 1.71 | 3.31% | $0.05 | $0.32 | 7.75% |
| Tripadvisor Inc | 34.10 | 2.44 | 1.05 | -1.39% | $0.01 | $0.37 | 0.76% |
| Hello Group Inc | 7.81 | 0.86 | 1.03 | 3.21% | $0.44 | $0.95 | -1.55% |
| Ziff Davis Inc | 17.59 | 0.71 | 0.96 | 1.37% | $0.09 | $0.28 | 4.5% |
| Vtex | 89.72 | 4.79 | 5.27 | 0.34% | $0.0 | $0.04 | 2.9% |
| Taboola.com Ltd | 87 | 1.11 | 0.67 | -0.85% | $0.01 | $0.12 | 3.26% |
| Average | 35.79 | 3.63 | 75.3 | 2.23% | $3.82 | $4.95 | 8.83% |
After examining Meta Platforms, the following trends can be inferred:
At 26.7, the stock's Price to Earnings ratio is 0.75x less than the industry average, suggesting favorable growth potential.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 9.28 which exceeds the industry average by 2.56x.
The Price to Sales ratio is 10.44, which is 0.14x the industry average. This suggests a possible undervaluation based on sales performance.
The Return on Equity (ROE) of 9.05% is 6.82% above the industry average, highlighting efficient use of equity to generate profits.
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.52 Billion, which is 5.9x above the industry average, implying stronger profitability and robust cash flow generation.
With higher gross profit of $34.74 Billion, which indicates 7.02x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of 16.07%, which surpasses the industry average of 8.83%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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 evaluating Meta Platforms against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
When considering the debt-to-equity ratio, Meta Platforms exhibits a stronger financial position compared to its top 4 peers.
This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.27, 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 ratio suggests the market values the company's assets highly. A low PS ratio implies sales are generating strong value. The high ROE, EBITDA, gross profit, and revenue growth indicate strong financial performance relative to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.