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 | 29.68 | 5.56 | 3.21 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 43.41 | 12.85 | 3 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 22.94 | 9.48 | 4.12 | 11.31% | $0.8 | $2.12 | 14.97% |
| Coupang Inc | 177.36 | 7.72 | 1.05 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 15.70 | 5.02 | 1.36 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 24.99 | 3.14 | 2.27 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 80.41 | 5.63 | 5.74 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 7.81 | 0.98 | 0.22 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 5.60 | 0.37 | 0.10 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 55.64 | 2.77 | 0.76 | 5.28% | $0.07 | $0.26 | 15.59% |
| Hour Loop Inc | 39.60 | 9.96 | 0.49 | -8.96% | $-0.0 | $0.03 | 3.03% |
| Average | 47.35 | 5.79 | 1.91 | 5.18% | $0.4 | $1.47 | 12.56% |
By conducting a comprehensive analysis of Amazon.com, the following trends become evident:
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The stock's Price to Earnings ratio of 29.68 is lower than the industry average by 0.63x, suggesting potential value in the eyes of market participants.
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The current Price to Book ratio of 5.56, which is 0.96x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The stock's relatively high Price to Sales ratio of 3.21, surpassing the industry average by 1.68x, may indicate an aspect of overvaluation in terms of sales performance.
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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.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $46.76 Billion, which is 116.9x above the industry average, indicating stronger profitability and robust cash flow generation.
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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.
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The company's revenue growth of 13.63% exceeds the industry average of 12.56%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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 evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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Amazon.com exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.37.
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This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for 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 revenue growth rate is also high, indicating a positive outlook for future earnings potential compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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