In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for 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 | 19.79 | 4.81 | 3.45 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 50.05 | 11.91 | 2.65 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 22.93 | 10.41 | 4.18 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.84 | 4.77 | 1.53 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 41.98 | 6.87 | 5.96 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 7.99 | 1.16 | 0.26 | 3.46% | $0.46 | $2.21 | 1.2% |
| Ollie's Bargain Outlet Holdings Inc | 16.38 | 2.29 | 1.61 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.06 | 0.45 | 0.12 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 60.80 | 3.15 | 0.84 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 42.97 | 6.81 | 0.39 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 29.44 | 5.31 | 1.95 | 6.39% | $0.34 | $1.29 | 16.16% |
Upon analyzing Amazon.com, the following trends can be observed:
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The stock's Price to Earnings ratio of 19.79 is lower than the industry average by 0.67x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 4.81, significantly falling below the industry average by 0.91x, it suggests undervaluation and the possibility of untapped growth prospects.
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With a relatively high Price to Sales ratio of 3.45, which is 1.77x 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 6.22% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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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 is experiencing remarkable revenue growth, with a rate of 19.62%, outperforming the industry average of 16.16%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 high revenue growth rate further highlights its competitive position within the industry.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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