In the fast-paced 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) in comparison to its major competitors within the Broadline Retail industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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 | 36.42 | 6.83 | 3.94 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 46.68 | 13.82 | 3.23 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 23.54 | 9.74 | 4.23 | 11.31% | $0.8 | $2.12 | 14.97% |
| Coupang Inc | 186.27 | 8.10 | 1.10 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 16.34 | 5.22 | 1.42 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 23.66 | 2.97 | 2.15 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 82.46 | 5.79 | 5.88 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 8.62 | 1.09 | 0.24 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 6.41 | 0.42 | 0.11 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 62.43 | 3.11 | 0.85 | 5.28% | $0.07 | $0.26 | 15.59% |
| Hour Loop Inc | 41 | 10.31 | 0.51 | -8.96% | $-0.0 | $0.03 | 3.03% |
| Average | 49.74 | 6.06 | 1.97 | 5.18% | $0.4 | $1.47 | 12.56% |
By carefully studying Amazon.com, we can deduce the following trends:
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A Price to Earnings ratio of 36.42 significantly below the industry average by 0.73x suggests undervaluation. This can make the stock appealing for those seeking growth.
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With a Price to Book ratio of 6.83, which is 1.13x 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 3.94, which is 2.0x 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 company has a higher Return on Equity (ROE) of 5.43%, which is 0.25% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $46.76 Billion, which is 116.9x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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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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The company is experiencing remarkable revenue growth, with a rate of 13.63%, outperforming the industry average of 12.56%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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.
When evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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Amazon.com is in a relatively 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 implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
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 competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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