In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com AMZN against its key competitors in the Broadline Retail industry. By analyzing important 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 | 48.94 | 9.29 | 3.95 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.73 | 1.56 | 1.61 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 9.90 | 3.63 | 2.88 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 61.84 | 22.08 | 4.83 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.82 | 1.69 | 0.37 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 40.18 | 9.82 | 1.42 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.07 | 5.64 | 3.17 | 11.59% | $0.95 | $1.85 | 3.04% |
| MINISO Group Holding Ltd | 25.15 | 5.94 | 4.10 | 6.68% | $0.88 | $2.03 | 19.29% |
| Vipshop Holdings Ltd | 6.55 | 1.36 | 0.49 | 2.76% | $1.47 | $4.96 | -9.18% |
| Ollie's Bargain Outlet Holdings Inc | 35.38 | 4.50 | 3.26 | 2.24% | $0.06 | $0.21 | 7.79% |
| Dillard's Inc | 11.74 | 3.69 | 1.10 | 6.37% | $0.21 | $0.63 | -3.53% |
| Macy's Inc | 27.57 | 1.13 | 0.20 | 0.66% | $0.29 | $2.04 | -3.79% |
| Nordstrom Inc | 15.32 | 4.05 | 0.27 | 4.75% | $0.3 | $1.31 | 4.34% |
| Savers Value Village Inc | 22.28 | 3.79 | 1.13 | 5.09% | $0.07 | $0.22 | 0.53% |
| Kohl's Corp | 6.48 | 0.42 | 0.10 | 0.58% | $0.28 | $1.57 | -8.49% |
| Groupon Inc | 17.54 | 12.03 | 0.90 | 34.72% | $0.03 | $0.1 | -9.48% |
| Hour Loop Inc | 88 | 23.12 | 1.08 | 7.3% | $0.0 | $0.02 | 6.6% |
| Average | 25.85 | 6.53 | 1.68 | 7.13% | $6.54 | $13.55 | 7.77% |
After thoroughly examining Amazon.com, the following trends can be inferred:
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At 48.94, the stock's Price to Earnings ratio significantly exceeds the industry average by 1.89x, suggesting a premium valuation relative to industry peers.
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The elevated Price to Book ratio of 9.29 relative to the industry average by 1.42x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.95, which is 2.35x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 6.19% that is 0.94% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.91x above the industry average, indicating stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $31.0 Billion, which indicates 2.29x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 11.04%, which surpasses the industry average of 7.77%, the company is demonstrating robust sales expansion and gaining market share.
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 assessing Amazon.com against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.
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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 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 generating strong returns on shareholder equity. However, the high EBITDA, gross profit, and revenue growth show that the company is performing well in terms of operational efficiency and revenue generation within the industry sector.
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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