In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Amazon.com (NASDAQ:AMZN) alongside its primary competitors in the Broadline Retail industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide 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 | 36.22 | 6.79 | 3.92 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 45.48 | 13.46 | 3.14 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 23.56 | 9.74 | 4.23 | 11.31% | $0.8 | $2.12 | 14.97% |
| Coupang Inc | 184.91 | 7.95 | 1.09 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 16 | 5.12 | 1.39 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 22.81 | 2.86 | 2.07 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 81.90 | 5.75 | 5.84 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 8.38 | 1.05 | 0.24 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 6.22 | 0.41 | 0.11 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 60.43 | 3 | 0.82 | 5.28% | $0.07 | $0.26 | 15.59% |
| Hour Loop Inc | 40.20 | 10.11 | 0.50 | -8.96% | $-0.0 | $0.03 | 3.03% |
| Average | 48.99 | 5.94 | 1.94 | 5.18% | $0.4 | $1.47 | 12.56% |
Through a meticulous analysis of Amazon.com, we can observe the following trends:
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The Price to Earnings ratio of 36.22 is 0.74x lower than the industry average, indicating potential undervaluation for the stock.
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The elevated Price to Book ratio of 6.79 relative to the industry average by 1.14x suggests company might be overvalued based on its book value.
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The stock's relatively high Price to Sales ratio of 3.92, surpassing the industry average by 2.02x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 5.43% that is 0.25% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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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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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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With a revenue growth of 13.63%, which surpasses the industry average of 12.56%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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 examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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Amazon.com is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.37.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
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 peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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