In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial 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 | 33.43 | 6.84 | 3.70 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 22.66 | 2.74 | 2.81 | 2.05% | $27.26 | $97.01 | 4.77% |
| PDD Holdings Inc | 10.92 | 2.73 | 2.67 | 7.79% | $25.03 | $61.44 | 8.98% |
| MercadoLibre Inc | 51.30 | 17.14 | 4.07 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 54.69 | 7.27 | 3.76 | 3.77% | $0.48 | $2.6 | 38.3% |
| JD.com Inc | 9.79 | 1.27 | 0.24 | 2.3% | $7.36 | $50.47 | 14.85% |
| eBay Inc | 20.94 | 9.04 | 4.18 | 13.35% | $0.74 | $2.0 | 9.47% |
| Coupang Inc | 99 | 8.01 | 1.16 | 2.02% | $0.32 | $2.72 | 17.81% |
| Dillard's Inc | 17.63 | 4.95 | 1.54 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 9.67 | 1.57 | 0.63 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie's Bargain Outlet Holdings Inc | 32.11 | 3.88 | 2.82 | 2.55% | $0.08 | $0.25 | 18.59% |
| Global E Online Ltd | 984.50 | 7.16 | 7.71 | 1.43% | $0.02 | $0.1 | 25.46% |
| MINISO Group Holding Ltd | 19.68 | 3.87 | 2.13 | 4.08% | $0.79 | $2.59 | 28.17% |
| Macy's Inc | 12.46 | 1.30 | 0.26 | 0.25% | $0.27 | $2.06 | 0.2% |
| Kohl's Corp | 11.16 | 0.55 | 0.14 | 0.2% | $0.25 | $1.52 | -3.64% |
| Hour Loop Inc | 60.67 | 8.35 | 0.45 | 7.15% | $0.0 | $0.02 | 7.56% |
| Average | 94.48 | 5.32 | 2.3 | 4.24% | $4.35 | $15.44 | 14.41% |
Through a thorough examination of Amazon.com, we can discern the following trends:
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The stock's Price to Earnings ratio of 33.43 is lower than the industry average by 0.35x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 6.84, which is 1.29x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The Price to Sales ratio of 3.7, which is 1.61x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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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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Compared to its industry, the company has higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, indicating 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 provides insights into the proportion of debt a company has in relation to its equity and asset value.
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.
In light of the Debt-to-Equity ratio, a comparison between Amazon.com and its top 4 peers reveals the following information:
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When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.37, which can be perceived as a positive aspect 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 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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