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 | 21.33 | 5.18 | 3.72 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 49.73 | 11.83 | 2.63 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.97 | 9.98 | 4.01 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.07 | 4.52 | 1.45 | 13.17% | $0.27 | $0.72 | 2.69% |
| Global E Online Ltd | 47.92 | 7.84 | 6.80 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.85 | 1.30 | 0.29 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 19.23 | 2.48 | 1.75 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 8.24 | 0.55 | 0.14 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 72.20 | 3.76 | 1 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 49.25 | 7.80 | 0.45 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 32.5 | 5.56 | 2.06 | 6.47% | $0.31 | $1.25 | 17.04% |
When closely examining Amazon.com, the following trends emerge:
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The Price to Earnings ratio of 21.33 is 0.66x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 5.18, 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 3.72, which is 1.81x 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 12.61%, which is 6.14% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion is 329.55x above the industry average, highlighting stronger profitability and robust cash flow generation.
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The gross profit of $104.83 Billion is 83.86x 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 17.04%.
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.
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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When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.4, which can be perceived as a positive aspect by investors.
Key Takeaways
For Amazon.com, the PE and PB ratios suggest that the stock is undervalued compared to its peers in the Broadline Retail industry. However, the high PS ratio indicates that the stock may be overvalued based on its revenue. In terms of profitability, Amazon.com shows strong performance with high ROE, EBITDA, and gross profit margins, outperforming its industry peers. Additionally, the company's high revenue growth rate further highlights its strong position within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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