In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in comparison to its major competitors within the Broadline Retail industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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 | 20.40 | 4.96 | 3.55 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 51.69 | 12.30 | 2.74 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.90 | 10.40 | 4.18 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.95 | 4.81 | 1.54 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 42.60 | 6.97 | 6.05 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 8.27 | 1.20 | 0.27 | 3.46% | $0.46 | $2.21 | 1.2% |
| Ollie's Bargain Outlet Holdings Inc | 17.23 | 2.41 | 1.69 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.37 | 0.47 | 0.13 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 65.73 | 3.40 | 0.91 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 45.25 | 7.17 | 0.42 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 30.67 | 5.46 | 1.99 | 6.39% | $0.34 | $1.29 | 16.16% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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At 20.4, the stock's Price to Earnings ratio is 0.67x less than the industry average, suggesting favorable growth potential.
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Considering a Price to Book ratio of 4.96, which is well below the industry average by 0.91x, 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 3.55, surpassing the industry average by 1.78x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 12.61% is 6.22% above the industry average, highlighting 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 300.47x 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 81.26x 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% is notably higher compared to the industry average of 16.16%, showcasing exceptional sales performance and strong demand for its products or services.
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.
By considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:
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Amazon.com has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.4.
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This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
Key Takeaways
For Amazon.com, the PE and PB ratios are low compared to peers in the Broadline Retail industry, indicating potential undervaluation. However, the PS ratio is high, suggesting a premium valuation based on revenue. In terms of profitability metrics, Amazon.com shows high ROE, EBITDA, and gross profit margins, outperforming industry peers. Additionally, the company exhibits strong revenue growth, reflecting a positive outlook for future performance within the sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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