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 | 29.26 | 5.48 | 3.17 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 43.54 | 12.89 | 3.01 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 22.10 | 9.14 | 3.97 | 11.31% | $0.8 | $2.12 | 14.97% |
| Coupang Inc | 172.27 | 7.49 | 1.02 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 15.72 | 5.02 | 1.37 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 24.48 | 3.07 | 2.22 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 79.95 | 5.60 | 5.70 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 7.68 | 0.97 | 0.22 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 5.39 | 0.36 | 0.09 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 53.57 | 2.67 | 0.73 | 5.28% | $0.07 | $0.26 | 15.59% |
| Hour Loop Inc | 36.40 | 9.16 | 0.45 | -8.96% | $-0.0 | $0.03 | 3.03% |
| Average | 46.11 | 5.64 | 1.88 | 5.18% | $0.4 | $1.47 | 12.56% |
Through an analysis of Amazon.com, we can infer the following trends:
-
With a Price to Earnings ratio of 29.26, which is 0.63x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
-
Considering a Price to Book ratio of 5.48, which is well below the industry average by 0.97x, the stock may be undervalued based on its book value compared to its peers.
-
The stock's relatively high Price to Sales ratio of 3.17, surpassing the industry average by 1.69x, may indicate an aspect of overvaluation in terms of sales performance.
-
The company has a higher Return on Equity (ROE) of 5.43%, which is 0.25% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
-
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $46.76 Billion, which is 116.9x above the industry average, implying stronger profitability and robust cash flow generation.
-
The gross profit of $103.43 Billion is 70.36x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
-
The company is experiencing remarkable revenue growth, with a rate of 13.63%, outperforming the industry average of 12.56%.
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:
-
Compared to its top 4 peers, Amazon.com has a stronger financial position indicated by its lower debt-to-equity ratio of 0.37.
-
This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
For Amazon.com in the Broadline Retail industry, the PE and PB ratios suggest the stock is undervalued compared to peers. However, the high PS ratio indicates the stock may be overvalued based on revenue. In terms of profitability, Amazon.com shows strong performance with high ROE, EBITDA, and gross profit margins. Additionally, the company's high revenue growth rate further highlights its competitive position within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Login to comment