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 | 20.41 | 4.96 | 3.56 | 12.61% | $102.16 | $104.83 | 19.62% |
| MercadoLibre Inc | 48.62 | 11.57 | 2.58 | 6.17% | $0.96 | $4.16 | 49.76% |
| eBay Inc | 23.50 | 10.67 | 4.28 | 12.12% | $0.83 | $2.3 | 14.8% |
| Dillard's Inc | 14.58 | 4.69 | 1.51 | 4.71% | $0.17 | $0.62 | -0.36% |
| Global E Online Ltd | 43.25 | 7.07 | 6.14 | 5.26% | $0.05 | $0.13 | 39.15% |
| Macy's Inc | 8.04 | 1.16 | 0.26 | 3.46% | $0.46 | $2.21 | 1.2% |
| Ollie's Bargain Outlet Holdings Inc | 16.96 | 2.38 | 1.66 | 4.51% | $0.13 | $0.32 | 9.09% |
| Kohl's Corp | 7.10 | 0.45 | 0.12 | 3.69% | $0.43 | $1.62 | -0.87% |
| Savers Value Village Inc | 60.27 | 3.12 | 0.84 | 4.95% | $0.07 | $0.25 | 7.43% |
| Hour Loop Inc | 44.25 | 7.01 | 0.41 | 12.6% | $0.0 | $0.02 | 25.24% |
| Average | 29.62 | 5.35 | 1.98 | 6.39% | $0.34 | $1.29 | 16.16% |
After thoroughly examining Amazon.com, the following trends can be inferred:
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With a Price to Earnings ratio of 20.41, which is 0.69x 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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The current Price to Book ratio of 4.96, which is 0.93x the industry average, is substantially lower than the industry average, indicating potential undervaluation.
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The stock's relatively high Price to Sales ratio of 3.56, surpassing the industry average by 1.8x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 12.61% that is 6.22% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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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 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% exceeds the industry average of 16.16%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.
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 examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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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 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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