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 | 20.87 | 5.07 | 3.64 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 48.40 | 11.51 | 2.56 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.49 | 9.76 | 3.92 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 13.40 | 4.31 | 1.38 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 46.91 | 7.67 | 6.66 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.60 | 1.26 | 0.28 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 18.86 | 2.44 | 1.72 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.86 | 0.53 | 0.14 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 70.20 | 3.63 | 0.97 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46 | 7.29 | 0.42 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 31.41 | 5.38 | 2.01 | 5.53% | $0.31 | $1.25 | 16.33% |
After thoroughly examining Amazon.com, the following trends can be inferred:
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The stock's Price to Earnings ratio of 20.87 is lower than the industry average by 0.66x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 5.07, significantly falling below the industry average by 0.94x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio of 3.64, which is 1.81x 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 12.61% that is 7.08% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 329.55x above the industry average, indicating stronger profitability and robust cash flow generation.
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With higher gross profit of $104.83 Billion, which indicates 83.86x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 19.62% is notably higher compared to the industry average of 16.33%, showcasing exceptional sales performance and strong demand for its products or services.
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.
By evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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When comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.4.
Key Takeaways
For Amazon.com in the Broadline Retail industry, the PE and PB ratios suggest the stock is undervalued compared to peers. However, the high PS ratio indicates the stock may be overvalued based on revenue. In terms of profitability, Amazon.com shows strong performance with high ROE, EBITDA, and gross profit margins. Additionally, the company's high revenue growth rate further highlights its competitive position within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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