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 | 20.26 | 4.93 | 3.53 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 51.86 | 12.34 | 2.75 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.07 | 10.02 | 4.02 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.31 | 4.60 | 1.48 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 41.50 | 6.79 | 5.89 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 8.47 | 1.11 | 0.25 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 16.09 | 2.25 | 1.58 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.21 | 0.46 | 0.13 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 64.27 | 3.32 | 0.89 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46.38 | 7.35 | 0.43 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 30.24 | 5.36 | 1.94 | 6.15% | $0.33 | $1.27 | 16.26% |
After thoroughly examining Amazon.com, the following trends can be inferred:
-
A Price to Earnings ratio of 20.26 significantly below the industry average by 0.67x suggests undervaluation. This can make the stock appealing for those seeking growth.
-
The current Price to Book ratio of 4.93, which is 0.92x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
-
With a relatively high Price to Sales ratio of 3.53, which is 1.82x the industry average, the stock might be considered overvalued based on sales performance.
-
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.
-
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 309.58x above the industry average, indicating stronger profitability and robust cash flow generation.
-
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.
-
The company is experiencing remarkable revenue growth, with a rate of 19.62%, outperforming the industry average of 16.26%.
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 considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:
-
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.
-
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 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 company may be overvalued based on revenue. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms its industry peers, reflecting strong financial health and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Login to comment