In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. By closely examining key financial metrics, market standing, and growth prospects, our objective 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 | 21.43 | 5.21 | 3.73 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 53.49 | 12.72 | 2.83 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.19 | 10.08 | 4.05 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.21 | 4.57 | 1.47 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 45.40 | 7.43 | 6.44 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.10 | 1.20 | 0.27 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 17.92 | 2.32 | 1.63 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.51 | 0.48 | 0.13 | 3.69% | $0.22 | $1.36 | 10.99% |
| Savers Value Village Inc | 70.47 | 3.65 | 0.98 | 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 | 31.81 | 5.53 | 2.02 | 5.98% | $0.31 | $1.25 | 17.78% |
Through an analysis of Amazon.com, we can infer the following trends:
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With a Price to Earnings ratio of 21.43, which is 0.67x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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Considering a Price to Book ratio of 5.21, 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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With a relatively high Price to Sales ratio of 3.73, which is 1.85x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 12.61% that is 6.63% 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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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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With a revenue growth of 19.62%, which surpasses the industry average of 17.78%, 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.
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 revenue growth rate is also high, indicating a positive outlook for future earnings potential compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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