In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 | 29.81 | 5.58 | 3.23 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 44.22 | 13.09 | 3.06 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 22.54 | 9.32 | 4.05 | 11.31% | $0.8 | $2.12 | 14.97% |
| Coupang Inc | 174.45 | 7.59 | 1.03 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 15.79 | 5.05 | 1.37 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 24.71 | 3.10 | 2.24 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 78.83 | 5.54 | 5.62 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 7.80 | 0.98 | 0.22 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 5.42 | 0.36 | 0.09 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 56.29 | 2.81 | 0.76 | 5.28% | $0.07 | $0.26 | 15.59% |
| Hour Loop Inc | 38.60 | 9.71 | 0.48 | -8.96% | $-0.0 | $0.03 | 3.03% |
| Average | 46.87 | 5.75 | 1.89 | 5.18% | $0.4 | $1.47 | 12.56% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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The Price to Earnings ratio of 29.81 is 0.64x lower than the industry average, indicating potential undervaluation for the stock.
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Considering a Price to Book ratio of 5.58, which is well below the industry average by 0.97x, the stock may be undervalued based on its book value compared to its peers.
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The stock's relatively high Price to Sales ratio of 3.23, surpassing the industry average by 1.71x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 5.43% is 0.25% above the industry average, highlighting efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $46.76 Billion, which is 116.9x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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The company has higher gross profit of $103.43 Billion, which indicates 70.36x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 13.63% is notably higher compared to the industry average of 12.56%, showcasing exceptional sales performance and strong demand for its products or services.
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.
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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In terms of the debt-to-equity ratio, Amazon.com has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.37.
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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