In the fast-paced 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) in comparison to its major competitors within the Broadline Retail industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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 | 20.83 | 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% | $0.43 | $1.62 | -0.87% |
| 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% | $0.34 | $1.28 | 15.89% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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At 20.83, the stock's Price to Earnings ratio is 0.66x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 5.06, significantly falling below the industry average by 0.91x, it suggests undervaluation and the possibility of untapped growth prospects.
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With a relatively high Price to Sales ratio of 3.63, which is 1.81x 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 6.46% 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 300.47x 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 81.9x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 19.62%, outperforming the industry average of 15.89%.
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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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 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 performance in the Broadline Retail sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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