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 | 20.94 | 5.09 | 3.65 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 53.06 | 12.62 | 2.81 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.89 | 9.94 | 3.99 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.48 | 4.65 | 1.49 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 44.44 | 7.27 | 6.31 | 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 | 18.38 | 2.38 | 1.68 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.70 | 0.49 | 0.13 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 72.27 | 3.74 | 1 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46.50 | 7.37 | 0.43 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 32.02 | 5.52 | 2.01 | 5.53% | $0.31 | $1.25 | 16.33% |
Upon analyzing Amazon.com, the following trends can be observed:
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The stock's Price to Earnings ratio of 20.94 is lower than the industry average by 0.65x, suggesting potential value in the eyes of market participants.
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The current Price to Book ratio of 5.09, which is 0.92x 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 3.65, surpassing the industry average by 1.82x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 12.61% is 7.08% above the industry average, highlighting efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 329.55x 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 83.86x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 19.62% exceeds the industry average of 16.33%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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 examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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Amazon.com exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.4.
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This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for 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 revenue. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms its industry peers, reflecting strong financial performance and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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