In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial 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 | 19.99 | 4.86 | 3.48 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 49.75 | 11.84 | 2.64 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.70 | 10.31 | 4.14 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.74 | 4.74 | 1.52 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 41.48 | 6.78 | 5.89 | 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 | 16.42 | 2.30 | 1.61 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.02 | 0.45 | 0.12 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 61.87 | 3.20 | 0.86 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 44.25 | 7.01 | 0.41 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 29.59 | 5.31 | 1.94 | 6.39% | $0.34 | $1.29 | 16.16% |
When closely examining Amazon.com, the following trends emerge:
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A Price to Earnings ratio of 19.99 significantly below the industry average by 0.68x suggests undervaluation. This can make the stock appealing for those seeking growth.
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With a Price to Book ratio of 4.86, significantly falling below the industry average by 0.92x, it suggests undervaluation and the possibility of untapped growth prospects.
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The stock's relatively high Price to Sales ratio of 3.48, surpassing the industry average by 1.79x, 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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With a revenue growth of 19.62%, which surpasses the industry average of 16.16%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 has a stronger financial position compared to its top 4 peers, as evidenced 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 perceived as a positive indicator 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, reflecting strong operational performance. Additionally, the high revenue growth rate further highlights Amazon.com's competitive position within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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