In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By examining key financial metrics, market position, and growth prospects, we aim 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 | 32.63 | 6.68 | 3.61 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 21.63 | 2.62 | 2.68 | 2.05% | $27.26 | $97.01 | 4.77% |
| PDD Holdings Inc | 10.56 | 2.64 | 2.58 | 7.79% | $25.03 | $61.44 | 8.98% |
| MercadoLibre Inc | 49.67 | 16.59 | 3.94 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 52.93 | 7.04 | 3.64 | 3.77% | $0.48 | $2.6 | 38.3% |
| JD.com Inc | 9.30 | 1.21 | 0.23 | 2.3% | $7.36 | $50.47 | 14.85% |
| eBay Inc | 20.11 | 8.69 | 4.01 | 13.35% | $0.74 | $2.0 | 9.47% |
| Coupang Inc | 97.52 | 7.89 | 1.14 | 2.02% | $0.32 | $2.72 | 17.81% |
| Dillard's Inc | 18.48 | 5.19 | 1.61 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 8.99 | 1.46 | 0.59 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie's Bargain Outlet Holdings Inc | 31.64 | 3.82 | 2.78 | 2.55% | $0.08 | $0.25 | 18.59% |
| Global E Online Ltd | 899 | 6.54 | 7.04 | 1.43% | $0.02 | $0.1 | 25.46% |
| MINISO Group Holding Ltd | 19.11 | 3.75 | 2.06 | 4.08% | $0.79 | $2.59 | 28.17% |
| Macy's Inc | 12.53 | 1.31 | 0.26 | 0.25% | $0.27 | $2.06 | 0.2% |
| Kohl's Corp | 10.42 | 0.51 | 0.13 | 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 | 88.21 | 5.18 | 2.21 | 4.24% | $4.35 | $15.44 | 14.41% |
After examining Amazon.com, the following trends can be inferred:
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With a Price to Earnings ratio of 32.63, which is 0.37x 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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The elevated Price to Book ratio of 6.68 relative to the industry average by 1.29x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.61, which is 1.63x 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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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion, which is 10.46x above the industry average, implying 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's revenue growth of 13.4% is significantly lower compared to the industry average of 14.41%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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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Compared to its top 4 peers, Amazon.com has a stronger financial position indicated by its lower debt-to-equity ratio of 0.37.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute 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 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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