Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in comparison to its major competitors within the Broadline Retail industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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 | 31.71 | 6.45 | 3.87 | 5.43% | $46.76 | $103.43 | 13.63% |
| MercadoLibre Inc | 45.50 | 13.47 | 3.15 | 8.62% | $1.07 | $3.78 | 44.56% |
| eBay Inc | 23.90 | 10.41 | 4.13 | 11.31% | $0.77 | $2.29 | 14.97% |
| Coupang Inc | 181.64 | 7.81 | 1.07 | -0.56% | $0.17 | $2.54 | 10.92% |
| Dillard's Inc | 15.63 | 5 | 1.36 | 10.66% | $0.3 | $0.72 | -3.03% |
| Ollie's Bargain Outlet Holdings Inc | 22.24 | 2.79 | 2.02 | 4.6% | $0.13 | $0.31 | 16.82% |
| Global E Online Ltd | 80.42 | 5.65 | 5.74 | 6.69% | $0.13 | $0.15 | 28.05% |
| Macy's Inc | 8.43 | 1.06 | 0.24 | 11.04% | $0.9 | $2.97 | -1.14% |
| Kohl's Corp | 5.95 | 0.39 | 0.10 | 3.13% | $0.39 | $1.85 | -4.15% |
| Savers Value Village Inc | 60.36 | 3 | 0.82 | 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 | 48.37 | 5.95 | 1.91 | 5.18% | $0.39 | $1.49 | 12.56% |
By conducting a comprehensive analysis of Amazon.com, the following trends become evident:
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A Price to Earnings ratio of 31.71 significantly below the industry average by 0.66x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The elevated Price to Book ratio of 6.45 relative to the industry average by 1.08x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.87, which is 2.03x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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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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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $46.76 Billion is 119.9x above the industry average, highlighting 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 69.42x 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 assesses the extent to which a company relies on borrowed funds compared to its 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 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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Compared to its top 4 peers, Amazon.com has a stronger financial position indicated by its lower debt-to-equity ratio of 0.37.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
For Amazon.com, the PE ratio is low compared to its peers in the Broadline Retail industry, indicating potential undervaluation. The high PB and PS ratios suggest that the market values Amazon.com's assets and sales highly. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth outperform its industry peers, reflecting strong financial performance and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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