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 | 22.85 | 5.55 | 3.98 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 50.11 | 13.22 | 3.03 | 5.94% | $0.89 | $3.86 | 49.03% |
| eBay Inc | 24.74 | 10.78 | 4.28 | 11.34% | $0.77 | $2.29 | 19.5% |
| Dillard's Inc | 14.57 | 4.73 | 1.45 | 13.17% | $0.27 | $0.72 | 2.69% |
| Macy's Inc | 10.72 | 1.41 | 0.31 | 1.3% | $0.33 | $2.03 | 2.07% |
| Global E Online Ltd | 59.97 | 7.41 | 6.95 | 3.29% | $0.04 | $0.11 | 32.76% |
| Ollie's Bargain Outlet Holdings Inc | 18.48 | 2.39 | 1.68 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 8.45 | 0.57 | 0.15 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 75.93 | 3.80 | 1.01 | -1.22% | $0.03 | $0.22 | 8.93% |
| Hour Loop Inc | 36.30 | 8.17 | 0.44 | 11.12% | $0.0 | $0.02 | 15.84% |
| Average | 33.25 | 5.83 | 2.14 | 5.29% | $0.29 | $1.21 | 15.89% |
After examining Amazon.com, the following trends can be inferred:
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The Price to Earnings ratio of 22.85 is 0.69x lower than the industry average, indicating potential undervaluation for the stock.
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The current Price to Book ratio of 5.55, which is 0.95x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The stock's relatively high Price to Sales ratio of 3.98, surpassing the industry average by 1.86x, 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 12.61%, which is 7.32% 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 $102.16 Billion, which is 352.28x above the industry average, the company demonstrates 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 is experiencing remarkable revenue growth, with a rate of 19.62%, outperforming the industry average of 15.89%.
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.
By analyzing Amazon.com in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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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 suggest the stock is undervalued compared to peers. However, the high PS ratio indicates the stock may be overvalued based on revenue. In terms of profitability, Amazon.com shows strong performance with high ROE, EBITDA, and gross profit margins. Additionally, the company's high revenue growth rate further highlights its competitive position within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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