In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 | 21.08 | 5.12 | 3.67 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 52.99 | 12.61 | 2.81 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.50 | 10.21 | 4.10 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.73 | 4.73 | 1.52 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 45.30 | 7.41 | 6.43 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.58 | 1.26 | 0.28 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 18.90 | 2.44 | 1.72 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.69 | 0.52 | 0.14 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 72.80 | 3.77 | 1.01 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 45 | 7.13 | 0.41 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 32.17 | 5.56 | 2.05 | 5.53% | $0.31 | $1.25 | 16.33% |
When conducting a detailed analysis of Amazon.com, the following trends become clear:
-
The Price to Earnings ratio of 21.08 is 0.66x lower than the industry average, indicating potential undervaluation for the stock.
-
The current Price to Book ratio of 5.12, which is 0.92x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
-
The Price to Sales ratio of 3.67, which is 1.79x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
-
The Return on Equity (ROE) of 12.61% is 7.08% above the industry average, highlighting efficient use of equity to generate profits.
-
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 329.55x above the industry average, indicating stronger profitability and robust cash flow generation.
-
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.
-
With a revenue growth of 19.62%, which surpasses the industry average of 16.33%, the company is demonstrating robust sales expansion and gaining market share.
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 light of the Debt-to-Equity ratio, a comparison between Amazon.com and its top 4 peers reveals the following information:
-
Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.4.
-
This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
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.
Login to comment