In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By examining key 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 | 20.62 | 5.01 | 3.59 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 52.52 | 12.49 | 2.78 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.49 | 9.76 | 3.92 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.45 | 4.64 | 1.49 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 44.86 | 7.34 | 6.37 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.30 | 1.22 | 0.27 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 17.69 | 2.29 | 1.61 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.79 | 0.49 | 0.14 | 3.69% | $0.22 | $1.36 | 10.99% |
| Savers Value Village Inc | 70.20 | 3.63 | 0.97 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46.75 | 7.41 | 0.43 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 31.67 | 5.47 | 2.0 | 5.98% | $0.31 | $1.25 | 17.78% |
After thoroughly examining Amazon.com, the following trends can be inferred:
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The Price to Earnings ratio of 20.62 is 0.65x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 5.01, significantly falling below the industry average by 0.92x, it suggests undervaluation and the possibility of untapped growth prospects.
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With a relatively high Price to Sales ratio of 3.59, which is 1.79x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 12.61%, which is 6.63% 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 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.
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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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With a revenue growth of 19.62%, which surpasses the industry average of 17.78%, the company is demonstrating robust sales expansion and gaining market share.
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.
By evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.4, the company relies less on debt financing and maintains a healthier 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 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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