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 | 20.81 | 5.06 | 3.62 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 52.30 | 12.44 | 2.77 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.88 | 9.93 | 3.99 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.24 | 4.58 | 1.47 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 46.08 | 7.54 | 6.54 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.43 | 1.24 | 0.28 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 18.84 | 2.43 | 1.72 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.39 | 0.50 | 0.13 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 71.67 | 3.71 | 0.99 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46.25 | 7.33 | 0.42 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 32.01 | 5.52 | 2.03 | 5.53% | $0.31 | $1.25 | 16.33% |
By conducting a comprehensive analysis of Amazon.com, the following trends become evident:
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The Price to Earnings ratio of 20.81 is 0.65x lower than the industry average, indicating potential undervaluation for the stock.
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The current Price to Book ratio of 5.06, which is 0.92x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The Price to Sales ratio of 3.62, which is 1.78x 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 7.08% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 329.55x above the industry average, implying stronger profitability and robust cash flow generation.
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With higher gross profit of $104.83 Billion, which indicates 83.86x above the industry average, the company demonstrates 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 16.33%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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 assessing Amazon.com against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Compared to its top 4 peers, Amazon.com has a stronger financial position indicated by its lower debt-to-equity ratio of 0.4.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
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 position in the market.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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