In the dynamic 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 AMZN and its primary competitors in the Broadline Retail industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 75% of total, followed by Amazon Web Services' cloud computing, storage, database, and other offerings (15%), advertising services (5% to 10%), and other the remainder. International segments constitute 25% to 30% of Amazon's non-AWS sales, 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 | 49.20 | 9.34 | 3.97 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 18.33 | 1.61 | 1.66 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 10.20 | 3.74 | 2.96 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 67.32 | 24.04 | 5.26 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 12.30 | 1.76 | 0.39 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 41.99 | 10.26 | 1.49 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 15.91 | 5.58 | 3.14 | 11.59% | $0.95 | $1.85 | 3.04% |
| Vipshop Holdings Ltd | 6.57 | 1.36 | 0.49 | 2.76% | $1.47 | $4.96 | -9.18% |
| MINISO Group Holding Ltd | 23.63 | 5.58 | 3.86 | 6.68% | $0.88 | $2.03 | 19.29% |
| Dillard's Inc | 11.78 | 3.70 | 1.10 | 6.37% | $0.21 | $0.63 | -3.53% |
| Ollie's Bargain Outlet Holdings Inc | 33.78 | 4.30 | 3.11 | 2.24% | $0.06 | $0.21 | 7.79% |
| Macy's Inc | 27.63 | 1.11 | 0.20 | 3.53% | $0.44 | $2.16 | -3.48% |
| Nordstrom Inc | 14.53 | 3.84 | 0.26 | 4.75% | $0.29 | $1.31 | 4.34% |
| Kohl's Corp | 6.65 | 0.43 | 0.10 | 0.58% | $0.28 | $1.57 | -8.49% |
| Savers Value Village Inc | 21.85 | 3.71 | 1.10 | 5.09% | $0.07 | $0.22 | 0.53% |
| Groupon Inc | 18.13 | 12.44 | 0.93 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 22.04 | 5.56 | 1.74 | 7.31% | $6.99 | $14.46 | 7.86% |
Through a detailed examination of Amazon.com, we can deduce the following trends:
-
The current Price to Earnings ratio of 49.2 is 2.23x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
-
The elevated Price to Book ratio of 9.34 relative to the industry average by 1.68x suggests company might be overvalued based on its book value.
-
The Price to Sales ratio of 3.97, which is 2.28x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
-
With a Return on Equity (ROE) of 6.19% that is 1.12% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
-
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion is 4.59x above the industry average, highlighting stronger profitability and robust cash flow generation.
-
Compared to its industry, the company has higher gross profit of $31.0 Billion, which indicates 2.14x above the industry average, indicating stronger profitability and higher earnings from its core operations.
-
The company's revenue growth of 11.04% exceeds the industry average of 7.86%, indicating strong sales performance and market outperformance.
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.
By analyzing Amazon.com in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
-
Amazon.com has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.52.
-
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, PB, and PS ratios are all high compared to its peers in the Broadline Retail industry, indicating that the stock may be overvalued. The low ROE suggests that Amazon.com is not efficiently utilizing its shareholders' equity. However, the high EBITDA, gross profit, and revenue growth show strong operational performance and potential for future growth in the industry sector analysis.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
