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 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 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 | 49.39 | 9.38 | 3.98 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 18.04 | 1.59 | 1.63 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 10.15 | 3.72 | 2.95 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 64.18 | 22.92 | 5.02 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 12.06 | 1.72 | 0.38 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 41.34 | 10.10 | 1.46 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.18 | 5.68 | 3.19 | 11.59% | $0.95 | $1.85 | 3.04% |
| MINISO Group Holding Ltd | 24.46 | 5.78 | 3.99 | 6.68% | $0.88 | $2.03 | 19.29% |
| Vipshop Holdings Ltd | 6.43 | 1.33 | 0.48 | 2.76% | $1.47 | $4.96 | -9.18% |
| Ollie's Bargain Outlet Holdings Inc | 34.21 | 4.36 | 3.15 | 2.24% | $0.06 | $0.21 | 7.79% |
| Dillard's Inc | 11.27 | 3.54 | 1.06 | 6.37% | $0.21 | $0.63 | -3.53% |
| Macy's Inc | 27.43 | 1.12 | 0.20 | 0.66% | $0.29 | $2.04 | -3.79% |
| Nordstrom Inc | 14.66 | 3.87 | 0.26 | 4.75% | $0.29 | $1.31 | 4.34% |
| Savers Value Village Inc | 22.41 | 3.81 | 1.13 | 5.09% | $0.07 | $0.22 | 0.53% |
| Kohl's Corp | 6.42 | 0.42 | 0.09 | 0.58% | $0.28 | $1.57 | -8.49% |
| Groupon Inc | 16.64 | 11.42 | 0.85 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.73 | 5.43 | 1.72 | 7.12% | $6.98 | $14.45 | 7.84% |
By analyzing Amazon.com, we can infer the following trends:
-
Notably, the current Price to Earnings ratio for this stock, 49.39, is 2.27x above the industry norm, reflecting a higher valuation relative to the industry.
-
With a Price to Book ratio of 9.38, which is 1.73x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
-
The stock's relatively high Price to Sales ratio of 3.98, surpassing the industry average by 2.31x, may indicate an aspect of overvaluation in terms of sales performance.
-
The company has a lower Return on Equity (ROE) of 6.19%, which is 0.93% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
-
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.6x above the industry average, indicating stronger profitability and robust cash flow generation.
-
With higher gross profit of $31.0 Billion, which indicates 2.15x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
-
The company's revenue growth of 11.04% exceeds the industry average of 7.84%, 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.
By considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:
-
Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.
-
With a lower debt-to-equity ratio of 0.52, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For PE, PB, and PS ratios, Amazon.com is considered overvalued compared to its peers in the Broadline Retail industry. This is indicated by the high PE, PB, and PS ratios. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com's performance is below average within the industry sector. The low ROE and high EBITDA, gross profit, and revenue growth suggest potential areas for improvement in Amazon.com's financial performance relative to its industry peers.
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.
