In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Amazon.com (NASDAQ:AMZN) alongside its primary competitors in the Broadline Retail industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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 | 32.09 | 6.53 | 3.92 | 5.43% | $59.58 | $94.06 | 13.63% |
| MercadoLibre Inc | 46.96 | 13.90 | 3.25 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 24.03 | 10.47 | 4.16 | 11.31% | $0.77 | $2.29 | 14.97% |
| Coupang Inc | 187.18 | 8.05 | 1.11 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 15.53 | 4.96 | 1.35 | 10.66% | $0.3 | $0.72 | -3.03% |
| Global E Online Ltd | 80.67 | 5.67 | 5.75 | 6.69% | $0.13 | $0.15 | 28.05% |
| Ollie's Bargain Outlet Holdings Inc | 22.01 | 2.76 | 2 | 4.6% | $0.13 | $0.31 | 16.82% |
| Macy's Inc | 8.49 | 1.07 | 0.24 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 6.16 | 0.41 | 0.11 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 59.43 | 2.95 | 0.81 | 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 | 49.17 | 6.06 | 1.93 | 5.18% | $0.39 | $1.49 | 12.56% |
Through a thorough examination of Amazon.com, we can discern the following trends:
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At 32.09, the stock's Price to Earnings ratio is 0.65x less than the industry average, suggesting favorable growth potential.
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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 6.53 which exceeds the industry average by 1.08x.
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The stock's relatively high Price to Sales ratio of 3.92, surpassing the industry average by 2.03x, may indicate an aspect of overvaluation in terms of sales performance.
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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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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $59.58 Billion, which is 152.77x 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 $94.06 Billion, which indicates 63.13x 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 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 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
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 the company's assets and sales highly. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth reflect strong financial performance relative to industry competitors. Overall, Amazon.com appears to be well-positioned in the Broadline Retail sector based on these valuation metrics.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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