In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Amazon.com (NASDAQ:AMZN) alongside its primary competitors in the Broadline Retail industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer 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 | 21.39 | 5.20 | 3.73 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 51.92 | 12.35 | 2.75 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.56 | 9.79 | 3.93 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.11 | 4.54 | 1.46 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 46.86 | 7.67 | 6.65 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.67 | 1.27 | 0.28 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 19.65 | 2.54 | 1.79 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.92 | 0.53 | 0.14 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 75.33 | 3.90 | 1.04 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46.50 | 7.37 | 0.43 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 32.61 | 5.55 | 2.05 | 5.53% | $0.31 | $1.25 | 16.33% |
Through an analysis of Amazon.com, we can infer the following trends:
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The stock's Price to Earnings ratio of 21.39 is lower than the industry average by 0.66x, suggesting potential value in the eyes of market participants.
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Considering a Price to Book ratio of 5.2, which is well below the industry average by 0.94x, the stock may be undervalued based on its book value compared to its peers.
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The Price to Sales ratio of 3.73, which is 1.82x 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 12.61% is 7.08% above the industry average, highlighting 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 $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% exceeds the industry average of 16.33%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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 analyzing Amazon.com in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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In terms of the debt-to-equity ratio, Amazon.com has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity 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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