In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Amazon.com (NASDAQ:AMZN) alongside its primary competitors in the Broadline Retail industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer 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 | 20.21 | 4.91 | 3.52 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 49.65 | 11.81 | 2.63 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 23.72 | 10.77 | 4.32 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.53 | 4.67 | 1.50 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 43.61 | 7.13 | 6.19 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 7.93 | 1.15 | 0.26 | 3.46% | $0.46 | $2.21 | 1.2% |
| Ollie's Bargain Outlet Holdings Inc | 17.04 | 2.39 | 1.67 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.17 | 0.45 | 0.13 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 61.73 | 3.19 | 0.86 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 43.50 | 6.89 | 0.40 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 29.88 | 5.38 | 2.0 | 6.39% | $0.34 | $1.29 | 16.16% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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A Price to Earnings ratio of 20.21 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 4.91, significantly falling below the industry average by 0.91x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio of 3.52, which is 1.76x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 12.61% that is 6.22% 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 300.47x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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The gross profit of $104.83 Billion is 81.26x above that of its industry, highlighting 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 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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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, 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 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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