Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in comparison to its major competitors within the Broadline Retail industry. By analyzing critical 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 | 20.66 | 5.02 | 3.60 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 51.62 | 12.28 | 2.73 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.64 | 10.28 | 4.13 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.91 | 4.79 | 1.54 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 42.27 | 6.91 | 6 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 8.09 | 1.17 | 0.27 | 3.46% | $0.46 | $2.21 | 1.2% |
| Ollie's Bargain Outlet Holdings Inc | 16.46 | 2.31 | 1.61 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.39 | 0.47 | 0.13 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 65 | 3.36 | 0.90 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46 | 7.29 | 0.42 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 30.49 | 5.43 | 1.97 | 6.39% | $0.34 | $1.29 | 16.16% |
Through an analysis of Amazon.com, we can infer the following trends:
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The stock's Price to Earnings ratio of 20.66 is lower than the industry average by 0.68x, suggesting potential value in the eyes of market participants.
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Considering a Price to Book ratio of 5.02, which is well below the industry average by 0.92x, the stock may be undervalued based on its book value compared to its peers.
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The stock's relatively high Price to Sales ratio of 3.6, surpassing the industry average by 1.83x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a higher Return on Equity (ROE) of 12.61%, which is 6.22% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 300.47x above the industry average, indicating stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $104.83 Billion, which indicates 81.26x 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 16.16%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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 evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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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 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, showcasing strong financial health and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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