In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By analyzing important 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 | 21.85 | 5.30 | 3.81 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 49.56 | 13.08 | 2.99 | 5.94% | $0.89 | $3.86 | 49.03% |
| eBay Inc | 26.33 | 11.47 | 4.55 | 11.34% | $0.77 | $2.29 | 19.5% |
| Dillard's Inc | 13.98 | 4.54 | 1.39 | 13.17% | $0.27 | $0.72 | 2.69% |
| Global E Online Ltd | 58.67 | 7.24 | 6.80 | 3.29% | $0.04 | $0.11 | 32.76% |
| Macy's Inc | 10.26 | 1.35 | 0.30 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 18.18 | 2.35 | 1.66 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 8.04 | 0.54 | 0.14 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 73.29 | 3.67 | 0.97 | -1.22% | $0.03 | $0.22 | 8.93% |
| Hour Loop Inc | 36.40 | 8.20 | 0.44 | 11.12% | $0.0 | $0.02 | 15.84% |
| Average | 32.75 | 5.83 | 2.14 | 5.29% | $0.29 | $1.21 | 15.89% |
When closely examining Amazon.com, the following trends emerge:
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The stock's Price to Earnings ratio of 21.85 is lower than the industry average by 0.67x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 5.3, significantly falling below the industry average by 0.91x, it suggests undervaluation and the possibility of untapped growth prospects.
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The stock's relatively high Price to Sales ratio of 3.81, surpassing the industry average by 1.78x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 12.61% that is 7.32% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 352.28x 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 $104.83 Billion, which indicates 86.64x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 19.62% is notably higher compared to the industry average of 15.89%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its 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 examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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When comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.4.
Key Takeaways
For Amazon.com in the Broadline Retail industry, the PE and PB ratios are low compared to peers, indicating potential undervaluation. However, the high PS ratio suggests a premium valuation based on revenue. In terms of profitability, Amazon.com shows high ROE, EBITDA, and gross profit, outperforming industry peers. Additionally, the high revenue growth rate further highlights Amazon.com's strong performance in the Broadline Retail sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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