In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Amazon.com (NASDAQ:AMZN) alongside its primary competitors in the Broadline Retail industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide 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 | 20.31 | 4.94 | 3.54 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 51.04 | 12.14 | 2.70 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 21.75 | 9.87 | 3.97 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.29 | 4.59 | 1.48 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 41.02 | 6.71 | 5.82 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 8.89 | 1.17 | 0.26 | 1.3% | $0.33 | $2.03 | 2.07% |
| Ollie's Bargain Outlet Holdings Inc | 16.19 | 2.27 | 1.59 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.52 | 0.48 | 0.13 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 65.60 | 3.39 | 0.91 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 45.50 | 7.21 | 0.42 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 30.2 | 5.31 | 1.92 | 6.15% | $0.33 | $1.27 | 16.26% |
After thoroughly examining Amazon.com, the following trends can be inferred:
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The Price to Earnings ratio of 20.31 is 0.67x lower than the industry average, indicating potential undervaluation for the stock.
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Considering a Price to Book ratio of 4.94, 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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The stock's relatively high Price to Sales ratio of 3.54, surpassing the industry average by 1.84x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 12.61% is 6.46% 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 309.58x 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 82.54x above the industry average, indicating 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 16.26%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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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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 company is undervalued compared to its peers. However, the high PS ratio indicates a premium valuation based on revenue. In terms of profitability, Amazon.com's high ROE, EBITDA, gross profit, and revenue growth outperform its industry peers, reflecting strong financial performance and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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