In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for 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 | 5.10 | 3.66 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 54.33 | 12.92 | 2.88 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.27 | 10.11 | 4.06 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.60 | 4.69 | 1.51 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 44.78 | 7.33 | 6.36 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.33 | 1.23 | 0.27 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 18.47 | 2.39 | 1.68 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.43 | 0.50 | 0.13 | -0.35% | $0.22 | $1.36 | -2.04% |
| Savers Value Village Inc | 71.47 | 3.70 | 0.99 | 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 | 32.08 | 5.57 | 2.03 | 5.53% | $0.31 | $1.25 | 16.33% |
By analyzing Amazon.com, we can infer the following trends:
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A Price to Earnings ratio of 21.0 significantly below the industry average by 0.65x suggests undervaluation. This can make the stock appealing for those seeking growth.
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Considering a Price to Book ratio of 5.1, which is well below the industry average by 0.92x, the stock may be undervalued based on its book value compared to its peers.
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The stock's relatively high Price to Sales ratio of 3.66, surpassing the industry average by 1.8x, may indicate an aspect of overvaluation in terms of sales performance.
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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 exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion, which is 329.55x above the industry average, implying stronger profitability and robust cash flow generation.
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The gross profit of $104.83 Billion is 83.86x above that of its industry, highlighting 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 an important measure to assess the financial structure and risk profile 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.
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 0.4.
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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 in the Broadline Retail industry, the PE and PB ratios are low compared to peers, indicating potential undervaluation. However, the high PS ratio suggests a premium valuation based on revenue. In terms of profitability, Amazon.com shows high ROE, EBITDA, and gross profit, reflecting strong operational performance. Additionally, the high revenue growth rate further highlights Amazon.com's competitive position within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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