In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) and its primary competitors in the Broadline Retail industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 | 20.83 | 5.06 | 3.63 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 54.16 | 12.88 | 2.87 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.24 | 10.10 | 4.06 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.94 | 4.80 | 1.54 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 43.49 | 7.11 | 6.17 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.29 | 1.22 | 0.27 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 16.49 | 2.31 | 1.62 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 8.30 | 0.53 | 0.15 | 3.69% | $0.22 | $1.36 | 10.99% |
| Savers Value Village Inc | 68.47 | 3.54 | 0.95 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 47 | 7.45 | 0.43 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 31.6 | 5.55 | 2.01 | 6.15% | $0.32 | $1.25 | 17.21% |
By closely examining Amazon.com, we can identify the following trends:
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A Price to Earnings ratio of 20.83 significantly below the industry average by 0.66x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The current Price to Book ratio of 5.06, which is 0.91x 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 3.63, surpassing the industry average by 1.81x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 12.61% that is 6.46% above the industry average, it appears that the company exhibits 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 319.25x above the industry average, the company demonstrates 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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With a revenue growth of 19.62%, which surpasses the industry average of 17.21%, 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.
When evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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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 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 revenue growth rate is also high, indicating a positive outlook for future earnings potential compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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