In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By analyzing important 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 | 34.27 | 7.02 | 3.79 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 22.26 | 2.69 | 2.76 | 2.05% | $27.26 | $97.01 | 4.77% |
| PDD Holdings Inc | 11.36 | 2.84 | 2.78 | 7.79% | $25.03 | $61.44 | 8.98% |
| MercadoLibre Inc | 50.61 | 16.91 | 4.01 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 56.71 | 7.54 | 3.90 | 3.77% | $0.48 | $2.6 | 38.3% |
| JD.com Inc | 9.80 | 1.27 | 0.24 | 2.3% | $7.36 | $50.47 | 14.85% |
| eBay Inc | 20.92 | 9.04 | 4.18 | 13.35% | $0.74 | $2.0 | 9.47% |
| Coupang Inc | 104.62 | 8.46 | 1.22 | 2.02% | $0.32 | $2.72 | 17.81% |
| Dillard's Inc | 19.03 | 5.35 | 1.66 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 9.73 | 1.58 | 0.64 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie's Bargain Outlet Holdings Inc | 32.63 | 3.94 | 2.87 | 2.55% | $0.08 | $0.25 | 18.59% |
| Global E Online Ltd | 1017.50 | 7.40 | 7.97 | 1.43% | $0.02 | $0.1 | 25.46% |
| Macy's Inc | 12.94 | 1.35 | 0.27 | 0.25% | $0.27 | $2.06 | 0.2% |
| MINISO Group Holding Ltd | 19.63 | 3.86 | 2.12 | 4.08% | $0.79 | $2.59 | 28.17% |
| Kohl's Corp | 11.84 | 0.58 | 0.15 | 0.2% | $0.25 | $1.52 | -3.64% |
| Hour Loop Inc | 61.33 | 8.44 | 0.46 | 7.15% | $0.0 | $0.02 | 7.56% |
| Average | 97.39 | 5.42 | 2.35 | 4.24% | $4.35 | $15.44 | 14.41% |
When conducting a detailed analysis of Amazon.com, the following trends become clear:
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A Price to Earnings ratio of 34.27 significantly below the industry average by 0.35x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The elevated Price to Book ratio of 7.02 relative to the industry average by 1.3x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.79, which is 1.61x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The company has a higher Return on Equity (ROE) of 6.02%, which is 1.78% 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 $45.5 Billion, which is 10.46x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 13.4% is significantly lower compared to the industry average of 14.41%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its 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.
In terms of the Debt-to-Equity ratio, Amazon.com stands in comparison with its top 4 peers, leading to the following comparisons:
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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 0.37.
Key Takeaways
For Amazon.com, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers in the Broadline Retail industry. However, the high ROE, EBITDA, and gross profit suggest strong profitability and operational efficiency for Amazon.com. The low revenue growth rate may be a concern for the company's future performance compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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