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 | 20.80 | 5.05 | 3.62 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 53.82 | 12.80 | 2.85 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.72 | 9.86 | 3.96 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 15.05 | 4.84 | 1.55 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 43.56 | 7.13 | 6.18 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.52 | 1.25 | 0.28 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 17.13 | 2.40 | 1.68 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 8.34 | 0.53 | 0.15 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 69.67 | 3.60 | 0.97 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 48 | 7.61 | 0.44 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 31.87 | 5.56 | 2.01 | 6.15% | $0.33 | $1.27 | 16.26% |
Through an analysis of Amazon.com, we can infer the following trends:
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At 20.8, the stock's Price to Earnings ratio is 0.65x less than the industry average, suggesting favorable growth potential.
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Considering a Price to Book ratio of 5.05, which is well below the industry average by 0.91x, the stock may be undervalued based on its book value compared to its peers.
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With a relatively high Price to Sales ratio of 3.62, which is 1.8x the industry average, the stock might be considered overvalued based on 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 309.58x 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 82.54x above the industry average, the company demonstrates 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 16.26%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.
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 light of the Debt-to-Equity ratio, a comparison between Amazon.com and its top 4 peers reveals the following information:
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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 its revenue. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms its industry peers, showcasing 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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