The entertainment industry is in the midst of a transformative shift fueled by rapid technological advancements and evolving audience preferences. Last year’s breakthroughs in generative AI have set the stage for an era of accelerated disruption, reshaping how content is created, distributed, and consumed.

As entertainment becomes more personalized and interactive, media-tech companies like Meta Platforms, Inc. (META), Palantir Technologies Inc. (PLTR), and Paramount Global (PARA) are redefining the boundaries of audience engagement and technology innovation.

Media platforms are evolving beyond just keeping us hooked with clever algorithms. They’re learning from the data we share, using it to shape what we see next and even to create their own content. The broadcast and media technology market is expected to hit $99.12 billion in 2029, growing at a CAGR of 13.1%. Meanwhile, generative AI is giving creators more tools to experiment with, blurring the line between platform and producer.

However, its impact extends beyond content creation; it revolutionizes how media companies interact with their audiences. Personalized experiences powered by AI drive engagement like never before, whether through tailored newsletters or dynamic content designed for platforms like TikTok and Instagram. This adaptability is crucial in a competitive landscape where attention spans are short, and audience loyalty is hard-earned.

With that in mind, let’s examine the fundamental aspects of the above-mentioned stocks in detail:

Meta Platforms, Inc. (META)

META develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments: Family of Apps and Reality Labs.

META’s trailing 12-month EBITDA margin of 50.70% is 174.4% higher than the industry average of 18.48%. Also, its trailing-12-month net income margin, ROCE, and ROTA of 35.55%, 36.13%, and 21.66% compared to their respective industry averages of 3.69%, 4.73%, and 1.78%.

For the third quarter that ended September 30, 2024, META’s total revenue increased 18.9% year-over-year to $40.59 billion, while its income from operations grew 26.2% from the year-ago value to $17.35 billion. META’s net income and EPS amounted to $15.69 billion and $6.03, representing increases of 35.4% and 37.4%, respectively, from the prior year’s quarter.

Street expects META’s EPS to increase 26.3% year-over-year to $6.73 in the fourth quarter (ended December 2024). Its revenue for the about-to-be-reported quarter is projected to grow by 17.1% from the prior year to $46.97 billion. Further, META has an excellent surprise history, surpassing the EPS and revenue estimates in each of the trailing four quarters.

The stock has gained 66.9% over the past year and 11.4% year-to-date to close the last trading session at $647.49.

META’s POWR Ratings reflect this promising outlook. It has an overall rating of B, translating to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

It has an A grade for Sentiment and Quality. Out of 48 stocks in the A-rated Internet industry, it is ranked #16. Click here to see the other META ratings for Growth, Value, Momentum, and Stability.

Palantir Technologies Inc. (PLTR)

PLTR builds software platforms that help organizations integrate their data, decisions, and operations at scale. The company operates through two segments: Commercial and Government. It has built three principal software platforms: Palantir Gotham, Palantir Foundry, and Palantir Apollo.

On December 18, 2024, PLTR extended its partnership with the U.S. Army, securing a four-year, $400.7 million agreement for the Army Vantage capability, with a potential ceiling of $618.9 million. This deal will enhance data and AI capabilities across the Department of the Army.

On the same day, the company partnered with Pray.com to expedite language translation for faith-based content, aiming to reduce costs and accelerate new product launches.

The stock’s trailing-12-month gross profit and EBITDA margins of 81.10% and 15.03% are 60.8% and 45.6% higher than their respective industry averages of 50.45% and 10.33%. Likewise, its trailing-12-month ROCE of 12.40% compares to the industry average of 4.47%.

PLTR’s revenue increased 30% year-over-year to $725.52 million for the third quarter ended September 30, 2024. Its adjusted income from operations grew 68.7% from the year-ago value to $275.52 million. The company’s attributable net income and adjusted EBITDA increased 100.7% and 64.9% year-over-year to $143.53 million and $283.60 million, respectively. Also, its adjusted EPS amounted to $0.10, representing a 42.8% increase from the prior year period.

Analysts expect PLTR’s EPS for the fourth quarter (ended December 31, 2022) to decline 65.4% year-over-year to $0.05. Its revenue is expected to register a year-over-year growth of 27.7%, settling at $776.78 million. Also, it topped the consensus EPS and revenue estimates in each of the trailing four quarters, which is excellent.

PLTR shares have surged 196.9% over the past six months to close the last trading session at $78.98.

PLTR’s bright prospects are reflected in its POWR Ratings. It has an A grade for Quality and a B for Growth.

In the 18-stock A-rated Software – SAAS industry, it is ranked #16. Click here to see the other PLTR ratings (Value, Momentum, Stability, and Sentiment).

Paramount Global (PARA)

PARA operates as a media and entertainment company worldwide. The company operates through TV Media; Direct-to-Consumer; and Filmed Entertainment segments.

On January 7, 2025, PARA announced the renewal of multi-year distribution agreements with Comcast’s Xfinity platforms, ensuring continued access to its diverse portfolio of networks such as CBS, MTV, Nickelodeon, and BET.

The deal also secures the availability of Paramount’s streaming services, including Paramount+, Pluto TV, and BET+, while giving Comcast the option to offer Paramount+ with SHOWTIME to eligible Xfinity customers. This renewal strengthens the company’s audience reach and boosts its streaming growth through Comcast’s extensive platform.

PARA’s trailing-12-month Return on Total Capital (ROTC) of 4.71% exceeds the 3.96% industry average by 19.1%. Likewise, its 58.45% trailing-12-month levered FCF margin favorably compares to the 8.78% industry average.

For the third quarter that ended September 30, 2024, PARA’s revenue and operating income amounted to $6.73 billion and $337 million, respectively. Its adjusted OIBDA grew by 19.8% from the year-ago value to $858 million. The company’s non-GAAP attributable net earnings from continuing operations came in at $327 million or $0.49 per share, reflecting an increase of 57.9% and 63.3% year-over-year, respectively.

The consensus revenue estimate of $8.06 billion for the fourth quarter (ended December 31, 2024) represents a 5.6% increase year-over-year. The consensus EPS estimate of $0.12 for the same quarter indicates a robust 202.9% growth from the prior year. Moreover, the company surpassed the EPS estimates in three of four trailing quarters.

Over the past three months, the stock has gained 6.4%, closing the last trading session at $11.07.

PARA’s POWR Ratings reflect this outlook. The stock has a B grade for Value and is ranked #12 among 13 stocks in the B-rated Entertainment – Media Producers industry.

To see additional POWR Ratings of PARA for Growth, Momentum, Stability, Sentiment, and Quality, click here.

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META shares were trading at $651.06 per share on Monday afternoon, up $3.57 (+0.55%). Year-to-date, META has gained 11.20%, versus a 1.89% rise in the benchmark S&P 500 index during the same period.

About the Author: Shweta Kumari

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More...

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