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 | 36.82 | 6.91 | 3.99 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 46.58 | 13.79 | 3.22 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 22.99 | 9.51 | 4.13 | 11.31% | $0.8 | $2.12 | 14.97% |
| Coupang Inc | 186.45 | 8.11 | 1.10 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 16.34 | 5.23 | 1.42 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 23.20 | 2.91 | 2.10 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 81.08 | 5.69 | 5.78 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 8.66 | 1.09 | 0.25 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 6.17 | 0.41 | 0.11 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 62.29 | 3.10 | 0.85 | 5.28% | $0.07 | $0.26 | 15.59% |
| Hour Loop Inc | 41.20 | 10.36 | 0.51 | -8.96% | $-0.0 | $0.03 | 3.03% |
| Average | 49.5 | 6.02 | 1.95 | 5.18% | $0.4 | $1.47 | 12.56% |
By carefully studying Amazon.com, we can deduce the following trends:
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The stock's Price to Earnings ratio of 36.82 is lower than the industry average by 0.74x, suggesting potential value in the eyes of 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 6.91 which exceeds the industry average by 1.15x.
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The Price to Sales ratio of 3.99, which is 2.05x 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 5.43% is 0.25% 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 $46.76 Billion, which is 116.9x 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 $103.43 Billion, which indicates 70.36x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 13.63%, which surpasses the industry average of 12.56%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:
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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
The low P/E ratio suggests Amazon.com may be undervalued compared to its peers in the Broadline Retail industry. However, the high P/B and P/S ratios indicate that the market values the company's assets and sales more highly. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth reflect strong financial performance relative to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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