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 | 34.83 | 6.53 | 3.77 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 46.25 | 13.69 | 3.20 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 23.93 | 9.90 | 4.30 | 11.31% | $0.8 | $2.12 | 14.97% |
| Coupang Inc | 195.36 | 8.50 | 1.15 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 16.27 | 5.20 | 1.41 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 24.31 | 3.05 | 2.20 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 86.26 | 6.06 | 6.15 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 8.22 | 1.04 | 0.23 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 6.02 | 0.40 | 0.11 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 59.79 | 2.98 | 0.81 | 5.28% | $0.07 | $0.26 | 15.59% |
| Hour Loop Inc | 44.60 | 11.22 | 0.55 | -8.96% | $-0.0 | $0.03 | 3.03% |
| Average | 51.1 | 6.2 | 2.01 | 5.18% | $0.4 | $1.47 | 12.56% |
After thoroughly examining Amazon.com, the following trends can be inferred:
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With a Price to Earnings ratio of 34.83, which is 0.68x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 6.53 which exceeds the industry average by 1.05x.
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The Price to Sales ratio of 3.77, which is 1.88x 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 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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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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Compared to its industry, 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 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.
When assessing Amazon.com against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.37, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
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. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth suggest that Amazon.com is performing exceptionally well and outpacing its industry competitors in terms of profitability and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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