In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) vis-à-vis its key competitors in the Broadline Retail industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight 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 | 21.90 | 5.32 | 3.82 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 49.78 | 11.84 | 2.64 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 23.24 | 10.48 | 4.22 | 12.12% | $0.77 | $2.29 | 1.46% |
| Dillard's Inc | 14.67 | 4.76 | 1.46 | 13.17% | $0.27 | $0.72 | 2.69% |
| Global E Online Ltd | 61.22 | 7.56 | 7.09 | 3.29% | $0.04 | $0.11 | 32.76% |
| Macy's Inc | 10.38 | 1.37 | 0.30 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 19.30 | 2.49 | 1.76 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.75 | 0.52 | 0.14 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 77.93 | 3.90 | 1.03 | -1.22% | $0.03 | $0.22 | 8.93% |
| Hour Loop Inc | 37 | 8.33 | 0.44 | 11.12% | $0.0 | $0.02 | 15.84% |
| Average | 33.47 | 5.69 | 2.12 | 5.4% | $0.3 | $1.24 | 13.97% |
Upon closer analysis of Amazon.com, the following trends become apparent:
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A Price to Earnings ratio of 21.9 significantly below the industry average by 0.65x suggests undervaluation. This can make the stock appealing for those seeking growth.
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With a Price to Book ratio of 5.32, significantly falling below the industry average by 0.93x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio of 3.82, which is 1.8x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 12.61% that is 7.21% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 340.53x above the industry average, implying stronger profitability and robust cash flow generation.
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The gross profit of $104.83 Billion is 84.54x above that of its industry, highlighting 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 13.97%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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.
In terms of the Debt-to-Equity ratio, Amazon.com stands in comparison with its top 4 peers, leading to the following comparisons:
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In terms of the debt-to-equity ratio, Amazon.com has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity 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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