In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate company's performance in 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 | 20.51 | 4.99 | 3.57 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 54.59 | 12.99 | 2.89 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.42 | 10.18 | 4.09 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.59 | 4.69 | 1.51 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 44.09 | 7.21 | 6.26 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.26 | 1.22 | 0.27 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 16.53 | 2.36 | 1.62 | 4.51% | $0.09 | $0.28 | 12.5% |
| Kohl's Corp | 8.24 | 0.52 | 0.14 | 3.69% | $0.22 | $1.36 | 10.99% |
| Savers Value Village Inc | 68.33 | 3.53 | 0.95 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46.62 | 7.39 | 0.43 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 31.63 | 5.57 | 2.02 | 6.15% | $0.31 | $1.25 | 17.59% |
When analyzing Amazon.com, the following trends become evident:
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At 20.51, the stock's Price to Earnings ratio is 0.65x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 4.99, significantly falling below the industry average by 0.9x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio of 3.57, which is 1.77x 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 6.46% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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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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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 17.59%, indicating strong sales performance and market outperformance.
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.
In terms of the Debt-to-Equity ratio, Amazon.com can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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When comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.4.
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, reflecting strong operational performance. Additionally, the high revenue growth rate further highlights Amazon.com's competitive position within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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