Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com AMZN in comparison to its major competitors within the Broadline Retail industry. By analyzing critical 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 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 | 47.12 | 8.95 | 3.80 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.60 | 1.55 | 1.59 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 10.04 | 3.68 | 2.92 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 60.89 | 21.74 | 4.76 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.79 | 1.68 | 0.37 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 39.66 | 9.69 | 1.40 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.15 | 5.67 | 3.19 | 11.59% | $0.95 | $1.85 | 3.04% |
| MINISO Group Holding Ltd | 23.87 | 5.64 | 3.89 | 6.68% | $0.88 | $2.03 | 19.29% |
| Vipshop Holdings Ltd | 6.42 | 1.33 | 0.48 | 2.76% | $1.47 | $4.96 | -9.18% |
| Ollie's Bargain Outlet Holdings Inc | 34.07 | 4.34 | 3.14 | 2.24% | $0.06 | $0.21 | 7.79% |
| Dillard's Inc | 11.21 | 3.52 | 1.05 | 6.37% | $0.21 | $0.63 | -3.53% |
| Macy's Inc | 25.98 | 1.06 | 0.19 | 0.66% | $0.29 | $2.04 | -3.79% |
| Nordstrom Inc | 14.49 | 3.82 | 0.25 | 4.75% | $0.3 | $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 | 6.25 | 0.41 | 0.09 | 0.58% | $0.28 | $1.57 | -8.49% |
| Groupon Inc | 15.68 | 10.76 | 0.80 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.1 | 5.25 | 1.68 | 7.12% | $6.98 | $14.45 | 7.84% |
By closely examining Amazon.com, we can identify the following trends:
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At 47.12, the stock's Price to Earnings ratio significantly exceeds the industry average by 2.23x, suggesting a premium valuation relative to industry peers.
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With a Price to Book ratio of 8.95, which is 1.7x 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.
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The Price to Sales ratio of 3.8, which is 2.26x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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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.
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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.
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The company has higher gross profit of $31.0 Billion, which indicates 2.15x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 11.04% is notably higher compared to the industry average of 7.84%, showcasing exceptional sales performance and strong demand for its products or services.
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.
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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When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.52, which can be perceived as a positive aspect 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 compared 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.
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