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 | 20.79 | 5.05 | 3.62 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 49.52 | 11.78 | 2.62 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.75 | 10.33 | 4.15 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.65 | 4.71 | 1.51 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 45.10 | 7.38 | 6.40 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 8.13 | 1.18 | 0.27 | 3.46% | $0.46 | $2.21 | 1.2% |
| Ollie's Bargain Outlet Holdings Inc | 17.84 | 2.50 | 1.75 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.48 | 0.47 | 0.13 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 61.47 | 3.18 | 0.85 | 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 | 30.05 | 5.38 | 2.01 | 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 20.79 significantly below the industry average by 0.69x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The current Price to Book ratio of 5.05, which is 0.94x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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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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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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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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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 helps evaluate the capital structure and financial leverage 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 assessing Amazon.com against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Amazon.com is in a relatively 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 implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
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, outperforming industry peers. Additionally, the high revenue growth rate further highlights Amazon.com's strong performance in the Broadline Retail sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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