In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) vis-à-vis its key competitors in the Broadline Retail industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight 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 | 34.73 | 6.51 | 3.76 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 46.72 | 13.83 | 3.23 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 23.57 | 9.75 | 4.23 | 11.31% | $0.8 | $2.12 | 14.97% |
| Coupang Inc | 188.36 | 8.19 | 1.11 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 16.59 | 5.30 | 1.44 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 24.23 | 3.04 | 2.20 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 80.62 | 5.66 | 5.75 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 8.23 | 1.04 | 0.23 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 5.72 | 0.38 | 0.10 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 59.93 | 2.99 | 0.81 | 5.28% | $0.07 | $0.26 | 15.59% |
| Hour Loop Inc | 37.80 | 9.51 | 0.47 | -8.96% | $-0.0 | $0.03 | 3.03% |
| Average | 49.18 | 5.97 | 1.96 | 5.18% | $0.4 | $1.47 | 12.56% |
By closely studying Amazon.com, we can observe the following trends:
-
A Price to Earnings ratio of 34.73 significantly below the industry average by 0.71x suggests undervaluation. This can make the stock appealing for those seeking growth.
-
The elevated Price to Book ratio of 6.51 relative to the industry average by 1.09x suggests company might be overvalued based on its book value.
-
The stock's relatively high Price to Sales ratio of 3.76, surpassing the industry average by 1.92x, may indicate an aspect of overvaluation in terms of sales performance.
-
The Return on Equity (ROE) of 5.43% is 0.25% above the industry average, highlighting efficient use of equity to generate profits.
-
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.
-
With higher gross profit of $103.43 Billion, which indicates 70.36x above the industry average, the company demonstrates 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 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 can be assessed by comparing it to its top 4 peers, resulting in the following observations:
-
When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
-
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
The low P/E ratio suggests Amazon.com may be undervalued compared to its peers in the Broadline Retail industry. However, the high P/B and P/S ratios indicate that the market values the company's assets and sales more highly. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth reflect strong financial performance relative to industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Login to comment