In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Meta Platforms (NASDAQ:META) in relation to its major competitors in the Interactive Media & Services industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 | 29.09 | 9.46 | 10.35 | 9.77% | $22.06 | $33.21 | 18.87% |
| Alphabet Inc | 26.27 | 7.72 | 7.29 | 8.55% | $35.74 | $51.79 | 15.09% |
| Baidu Inc | 11.14 | 0.83 | 1.60 | 2.98% | $9.27 | $17.16 | -2.58% |
| Pinterest Inc | 100.22 | 7.49 | 6.42 | 1.0% | $-0.0 | $0.71 | 17.71% |
| Kanzhun Ltd | 33.08 | 3.15 | 6.82 | 3.18% | $0.33 | $1.6 | 18.98% |
| ZoomInfo Technologies Inc | 332.67 | 2.05 | 3.05 | 1.35% | $0.07 | $0.26 | -3.25% |
| Yelp Inc | 24.52 | 3.58 | 2.09 | 5.21% | $0.06 | $0.33 | 4.41% |
| JOYY Inc | 13.65 | 0.46 | 1.25 | 1.17% | $0.06 | $0.21 | -1.48% |
| Ziff Davis Inc | 41.42 | 1.35 | 1.82 | -2.68% | $0.02 | $0.3 | 3.69% |
| Weibo Corp | 6.53 | 0.65 | 1.41 | 3.78% | $0.14 | $0.37 | 5.05% |
| Tripadvisor Inc | 61.15 | 2.35 | 1.30 | 4.33% | $0.1 | $0.48 | -0.19% |
| Hello Group Inc | 7.74 | 0.82 | 0.92 | 4.03% | $0.56 | $1.05 | -12.1% |
| Average | 59.85 | 2.77 | 3.09 | 2.99% | $4.21 | $6.75 | 4.12% |
After thoroughly examining Meta Platforms, the following trends can be inferred:
- The Price to Earnings ratio of 29.09 is 0.49x lower than the industry average, indicating potential undervaluation for the stock.
- It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 9.46 which exceeds the industry average by 3.42x.
- The stock’s relatively high Price to Sales ratio of 10.35, surpassing the industry average by 3.35x, may indicate an aspect of overvaluation in terms of sales performance.
- 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.
- The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $22.06 Billion is 5.24x above the industry average, highlighting stronger profitability and robust cash flow generation.
- Compared to its industry, 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.
- The company’s revenue growth of 18.87% is notably higher compared to the industry average of 4.12%, showcasing exceptional sales performance and strong demand for its products or services.