In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 | 20.90 | 5.08 | 3.64 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 52.67 | 12.53 | 2.79 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.76 | 9.88 | 3.97 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.34 | 4.61 | 1.48 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 42.44 | 6.94 | 6.02 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.07 | 1.19 | 0.27 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 18.67 | 2.41 | 1.70 | 2.99% | $0.09 | $0.28 | 14.25% |
| Kohl's Corp | 7.65 | 0.48 | 0.13 | 3.69% | $0.22 | $1.36 | 10.99% |
| Savers Value Village Inc | 68.87 | 3.56 | 0.95 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 47.25 | 7.49 | 0.43 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 31.41 | 5.45 | 1.97 | 5.98% | $0.31 | $1.25 | 17.78% |
After thoroughly examining Amazon.com, the following trends can be inferred:
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With a Price to Earnings ratio of 20.9, 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 5.08, which is well below the industry average by 0.93x, 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 3.64, which is 1.85x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 12.61%, which is 6.63% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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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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The company has higher gross profit of $104.83 Billion, which indicates 83.86x above the industry average, indicating 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 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.
In light of the Debt-to-Equity ratio, a comparison between Amazon.com and its top 4 peers reveals the following information:
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When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.4, which can be perceived as a positive aspect by investors.
Key Takeaways
For Amazon.com in the Broadline Retail industry, the PE and PB ratios suggest that the company is undervalued compared to its peers. However, the high PS ratio indicates that the market values Amazon.com's sales more highly. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms its industry peers, showcasing strong profitability and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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