Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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- Balance Sheet: Assets
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2012
- Current Ratio since 2012
- Price to Operating Profit (P/OP) since 2012
- Price to Book Value (P/BV) since 2012
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Current Valuation Ratios
Meta Platforms Inc., current price multiples
| Meta Platforms Inc. | Alphabet Inc. | Comcast Corp. | Netflix Inc. | Take-Two Interactive Software Inc. | Walt Disney Co. | Media & Entertainment | Communication Services | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | |||||||||||
| No. shares of common stock outstanding | |||||||||||
| Growth rate (g) | |||||||||||
| Earnings per share (EPS) | |||||||||||
| Next year expected EPS | |||||||||||
| Operating profit per share | |||||||||||
| Sales per share | |||||||||||
| Book value per share (BVPS) | |||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | |||||||||||
| Price to next year expected earnings | |||||||||||
| Price-earnings-growth (PEG) | |||||||||||
| Price to operating profit (P/OP) | |||||||||||
| Price to sales (P/S) | |||||||||||
| Price to book value (P/BV) | |||||||||||
Based on: 10-K (reporting date: 2024-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Meta Platforms Inc., historical price multiples
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Price to earnings (P/E) ratio
- The P/E ratio showed a significant decline from 25.89 in 2020 to 16.44 in 2021, indicating a reduction in the market's valuation relative to earnings during that period. It then increased to 21.1 in 2022, followed by a more pronounced rise to 30.97 in 2023. By the end of 2024, the ratio slightly decreased to 27.91. Overall, the P/E ratio exhibits volatility with a notable recovery and upward trend since 2021, suggesting changing market expectations or company earnings variability.
- Price to operating profit (P/OP) ratio
- The P/OP ratio experienced a similar pattern, decreasing from 23.1 in 2020 to 13.84 in 2021, indicating a more attractive valuation based on operating profit in that year. It recovered gradually to 16.91 in 2022, then rose sharply to 25.9 in 2023. In 2024, the ratio slightly eased to 25.09. This trend aligns with the P/E ratio movements, reflecting increased market valuations after 2021 relative to operating profit.
- Price to sales (P/S) ratio
- The P/S ratio declined from 8.78 in 2020 to 5.49 in 2021 and further to 4.2 in 2022, indicating a decreasing valuation relative to sales. However, the ratio surged back to 8.98 in 2023 and continued to increase to 10.58 in 2024. This suggests a notable shift toward higher valuations per unit of sales in the recent two years, possibly reflecting improved sales quality, market optimism, or anticipated revenue growth.
- Price to book value (P/BV) ratio
- The P/BV ratio decreased from 5.88 in 2020 to 5.18 in 2021 and dropped further to 3.89 in 2022, demonstrating declining market valuation relative to book value initially. Then, it substantially increased to 7.91 in 2023 and climbed further to 9.53 in 2024. This marked increase indicates rising investor confidence or reassessment of the company’s net asset value and potential future returns.
- Overall observations
- Between 2020 and 2022, all valuation ratios declined, signifying a period of reduced market optimism or increased caution regarding earnings, operating profit, sales, and book value metrics. From 2023 onwards, there is a clear reversal with all ratios increasing substantially, reflecting renewed investor confidence and higher valuation levels. The largest relative increases are observed in the P/S and P/BV ratios, suggesting markets are placing greater emphasis on sales performance and net asset value respectively in the latest years.
Price to Earnings (P/E)
Meta Platforms Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/E Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/E Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Meta Platforms Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends over the five-year period ending in 2024. The share price exhibited a fluctuating pattern with an initial decline from 265 US dollars in 2020 to 188.77 US dollars in 2022, followed by a significant recovery and sharp increase in the following two years, reaching 687 US dollars in 2024. This upward momentum in the latter years indicates strong market confidence and potential growth prospects perceived by investors.
Earnings per share (EPS) demonstrated variability but an overall upward trajectory. After growing from 10.24 US dollars in 2020 to 14.46 US dollars in 2021, EPS decreased to 8.95 US dollars in 2022. However, this was followed by a robust recovery in 2023 and 2024, reaching a peak of 24.61 US dollars. The EPS recovery aligns with the increase in share price, suggesting improved profitability and operational performance.
The price-to-earnings (P/E) ratio showed a general pattern of fluctuation corresponding to changes in share price and EPS. The ratio decreased from 25.89 in 2020 to a low of 16.44 in 2021, indicating the stock was possibly undervalued relative to earnings. It then increased to 21.1 in 2022, spiked to 30.97 in 2023, before settling to 27.91 in 2024. The rising P/E ratio in recent years suggests heightened investor expectations and willingness to pay a premium for future earnings growth, despite the temporary volatility in EPS and share price earlier in the period.
- Share Price
- Declined between 2020 and 2022, followed by a sharp increase through 2024, reflecting growing investor confidence.
- Earnings per Share (EPS)
- Showed a dip in 2022 after initial growth, then significantly improved in 2023 and 2024, indicating recovery and enhanced profitability.
- Price-to-Earnings (P/E) Ratio
- Varied inversely with earnings fluctuations, ultimately rising by 2023 and 2024, signaling increased investor optimism.
Price to Operating Profit (P/OP)
Meta Platforms Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Income from operations (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/OP Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/OP Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Meta Platforms Inc. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited notable volatility over the analyzed period. Beginning at $265 in 2020, the price declined to $237.76 in 2021 and further to $188.77 in 2022, reflecting a downward trend for two consecutive years. However, a significant recovery occurred in the following years, with the share price rising markedly to $474.99 in 2023 and continuing to increase to $687 by the end of 2024. This indicates strong positive momentum in market valuation in the latter years of the period.
- Operating Profit Per Share
- Operating profit per share showed a fluctuating but overall upward movement. The figure rose from $11.47 in 2020 to a peak of $17.18 in 2021, followed by a decrease to $11.16 in 2022. Subsequently, it rebounded significantly to $18.34 in 2023 and further increased to $27.38 in 2024. The progressive growth from 2022 onwards suggests improving operational efficiency or profitability in recent years.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio followed a somewhat inconsistent pattern. Starting at 23.1 in 2020, it dropped sharply to 13.84 in 2021, then rose again to 16.91 in 2022. In 2023, the ratio increased substantially to 25.9 before slightly declining to 25.09 in 2024. The elevated P/OP values in the last two years coincide with the marked increase in share price, which may indicate heightened market expectations relative to operating profit.
- Overall Analysis
- The data portrays a period of initial decline in both share price and operating profit per share, particularly in 2021 and 2022, suggesting challenges or market volatility during those years. The strong recovery in 2023 and 2024, evidenced by both rising share prices and improved operating profit per share, points to favorable developments or market sentiment. The P/OP ratio’s rise in the latter years indicates that the market valuation increased at a faster rate than operating profits, possibly reflecting investor optimism or anticipated future growth.
Price to Sales (P/S)
Meta Platforms Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenue (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/S Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/S Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Meta Platforms Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price experienced a decline from $265 at the end of 2020 to $188.77 by the end of 2022. However, a notable rebound is observed beginning in 2023, with the price rising sharply to $474.99, followed by further growth reaching $687 by the end of 2024. This pattern indicates initial investor caution or market challenges followed by renewed confidence or improved performance prospects in the later periods.
- Sales Per Share Trend
- Sales per share consistently increased throughout the period under review. Starting at $30.19 in 2020, the figure grew to $44.98 by the end of 2022, then continued its upward trajectory to $64.93 by the end of 2024. This steady increase suggests growth in revenue generation relative to the number of shares outstanding.
- Price-to-Sales (P/S) Ratio Trend
- The P/S ratio fell from 8.78 in 2020 to a low of 4.2 by the end of 2022, reflecting a decreasing market valuation relative to sales during that initial period. Subsequently, the ratio rose markedly to 8.98 in 2023 and further to 10.58 in 2024. The rising P/S ratio in the last two years indicates that the market is assigning a higher valuation to each dollar of sales, which could imply expectations of stronger future growth or improved profitability.
- Overall Analysis
- There is a clear pattern of recovery and growth following a period of decline between 2020 and 2022. The continuous increase in sales per share throughout the entire span indicates solid operational performance. The earlier decline in share price and P/S ratio suggests that the market was initially skeptical or cautious, but the subsequent surge in share price combined with rising P/S ratios points to regained market confidence and potentially improved fundamentals or positive outlooks beginning in 2023 and continuing through 2024.
Price to Book Value (P/BV)
Meta Platforms Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| P/BV Ratio, Sector | ||||||
| Media & Entertainment | ||||||
| P/BV Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Meta Platforms Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price experienced a declining trend from 2020 to 2022, decreasing from 265 US$ in 2020 to 188.77 US$ in 2022. However, a significant recovery is evident in the subsequent years, with the share price rising sharply to 474.99 US$ in 2023 and further increasing to 687 US$ in 2024.
- Book Value Per Share (BVPS)
- The book value per share showed a steady upward trend throughout the five-year period. It increased marginally from 45.05 US$ in 2020 to 48.49 US$ in 2022, followed by more pronounced growth to 60.08 US$ in 2023 and reaching 72.08 US$ in 2024.
- Price-to-Book Value Ratio (P/BV)
- The price-to-book value ratio decreased from 5.88 in 2020 to 3.89 in 2022, reflecting the decline in share price relative to book value per share. Subsequently, the ratio increased significantly to 7.91 in 2023 and further to 9.53 in 2024, indicating that market valuation grew at a faster pace than the book value during these years.