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 | 20.51 | 4.98 | 3.57 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 53.41 | 12.71 | 2.83 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.05 | 10.01 | 4.02 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.35 | 4.61 | 1.48 | 4.71% | $0.27 | $0.72 | -3.66% |
| Global E Online Ltd | 42.03 | 6.88 | 5.97 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 9.06 | 1.19 | 0.26 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 17.91 | 2.31 | 1.63 | 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 | 67.67 | 3.50 | 0.94 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 46.25 | 7.33 | 0.42 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 31.15 | 5.45 | 1.96 | 5.98% | $0.31 | $1.25 | 17.78% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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The Price to Earnings ratio of 20.51 is 0.66x lower than the industry average, indicating potential undervaluation for the stock.
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The current Price to Book ratio of 4.98, which is 0.91x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The Price to Sales ratio of 3.57, 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 6.63% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $102.16 Billion is 329.55x above the industry average, highlighting 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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The company is experiencing remarkable revenue growth, with a rate of 19.62%, outperforming the industry average of 17.78%.
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 evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights 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 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, outperforming industry peers. Additionally, the high revenue growth rate further highlights Amazon.com's strong performance in the Broadline Retail sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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