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 Amazon.com (NASDAQ:AMZN) and its primary competitors in the Broadline Retail 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.
Amazon.com Background
Amazon is the leading online retailer and marketplace for third party sellers. Retail related revenue represents approximately 74% of total, followed by Amazon Web Services (17%), and advertising services (9%). International segments constitute 22% of Amazon's total revenue, led by Germany, the United Kingdom, and Japan.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amazon.com Inc | 34.81 | 7.13 | 3.85 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 22.18 | 2.68 | 2.75 | 2.05% | $27.26 | $97.01 | 4.77% |
| PDD Holdings Inc | 12.02 | 3 | 2.94 | 7.79% | $25.03 | $61.44 | 8.98% |
| MercadoLibre Inc | 52.47 | 17.53 | 4.16 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 57.46 | 7.64 | 3.95 | 3.77% | $0.48 | $2.6 | 38.3% |
| JD.com Inc | 10.09 | 1.31 | 0.25 | 2.3% | $7.36 | $50.47 | 14.85% |
| eBay Inc | 20.69 | 8.94 | 4.13 | 13.35% | $0.74 | $2.0 | 9.47% |
| Coupang Inc | 105.57 | 8.54 | 1.23 | 2.02% | $0.32 | $2.72 | 17.81% |
| Dillard's Inc | 18.47 | 5.19 | 1.61 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 9.72 | 1.58 | 0.64 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie's Bargain Outlet Holdings Inc | 33.11 | 4 | 2.91 | 2.55% | $0.08 | $0.25 | 18.59% |
| Global E Online Ltd | 1022.50 | 7.44 | 8.01 | 1.43% | $0.02 | $0.1 | 25.46% |
| MINISO Group Holding Ltd | 20.48 | 4.02 | 2.21 | 4.08% | $0.79 | $2.59 | 28.17% |
| Macy's Inc | 12.90 | 1.35 | 0.27 | 0.25% | $0.27 | $2.06 | 0.2% |
| Kohl's Corp | 11.41 | 0.56 | 0.14 | 0.2% | $0.25 | $1.52 | -3.64% |
| Hour Loop Inc | 61.33 | 8.44 | 0.46 | 7.15% | $0.0 | $0.02 | 7.56% |
| Average | 98.03 | 5.48 | 2.38 | 4.24% | $4.35 | $15.44 | 14.41% |
When closely examining Amazon.com, the following trends emerge:
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With a Price to Earnings ratio of 34.81, which is 0.36x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 7.13 which exceeds the industry average by 1.3x.
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The stock's relatively high Price to Sales ratio of 3.85, surpassing the industry average by 1.62x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 6.02% is 1.78% above the industry average, highlighting efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion, which is 10.46x above the industry average, indicating stronger profitability and robust cash flow generation.
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With higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company is witnessing a substantial decline in revenue growth, with a rate of 13.4% compared to the industry average of 14.41%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its 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 Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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Amazon.com has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.37.
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This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
Key Takeaways
For Amazon.com, the PE ratio is low compared to its peers in the Broadline Retail industry, indicating potential undervaluation. The high PB and PS ratios suggest that the market values Amazon.com's assets and sales highly. Amazon.com's high ROE, EBITDA, and gross profit reflect strong profitability and operational efficiency. However, the low revenue growth rate may raise concerns about Amazon.com's future performance compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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