In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By examining key financial metrics, market position, and growth prospects, we aim 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 | 34.94 | 7.15 | 3.87 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 20.19 | 2.44 | 2.50 | 2.05% | $27.26 | $97.01 | 4.77% |
| PDD Holdings Inc | 12.24 | 3.06 | 2.99 | 7.79% | $25.03 | $61.44 | 8.98% |
| MercadoLibre Inc | 53.17 | 17.76 | 4.22 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 58.31 | 7.75 | 4.01 | 3.77% | $0.48 | $2.6 | 38.3% |
| JD.com Inc | 9.69 | 1.26 | 0.24 | 2.3% | $7.36 | $50.47 | 14.85% |
| Coupang Inc | 108.29 | 8.76 | 1.26 | 2.02% | $0.32 | $2.72 | 17.81% |
| eBay Inc | 20.16 | 8.71 | 4.02 | 13.35% | $0.74 | $2.0 | 9.47% |
| Dillard's Inc | 18.51 | 5.20 | 1.62 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 9.41 | 1.53 | 0.62 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie's Bargain Outlet Holdings Inc | 32.82 | 3.97 | 2.89 | 2.55% | $0.08 | $0.25 | 18.59% |
| Global E Online Ltd | 1039.75 | 7.57 | 8.14 | 1.43% | $0.02 | $0.1 | 25.46% |
| Macy's Inc | 13.63 | 1.42 | 0.28 | 0.25% | $0.27 | $2.06 | 0.2% |
| MINISO Group Holding Ltd | 19.91 | 3.91 | 2.15 | 4.08% | $0.79 | $2.59 | 28.17% |
| Kohl's Corp | 11.87 | 0.59 | 0.15 | 0.2% | $0.25 | $1.52 | -3.64% |
| Hour Loop Inc | 61.67 | 8.48 | 0.46 | 7.15% | $0.0 | $0.02 | 7.56% |
| Average | 99.31 | 5.49 | 2.37 | 4.24% | $4.35 | $15.44 | 14.41% |
Upon closer analysis of Amazon.com, the following trends become apparent:
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The stock's Price to Earnings ratio of 34.94 is lower than the industry average by 0.35x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 7.15, which is 1.3x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The stock's relatively high Price to Sales ratio of 3.87, surpassing the industry average by 1.63x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 6.02% is 1.78% above the industry average, highlighting efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion, which is 10.46x above the industry average, implying stronger profitability and robust cash flow generation.
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With higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 13.4% is significantly below the industry average of 14.41%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.
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 analyzing Amazon.com in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.37, which can be perceived as a positive aspect by investors.
Key Takeaways
For Amazon.com in the Broadline Retail industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting a premium valuation based on book value and sales. In terms of ROE, EBITDA, and gross profit, Amazon.com demonstrates strong performance relative to industry peers. However, the low revenue growth rate may raise concerns about future prospects compared to competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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