Assessing Amazon.com's Performance Against Competitors In Broadline Retail Industry

In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com AMZN in relation to its major competitors in the Broadline Retail industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight 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.

By conducting an in-depth analysis of Amazon.com, we can identify the following trends:

• At 42.09, the stock's Price to Earnings ratio significantly exceeds the industry average by 1.76x, suggesting a premium valuation relative to industry peers.

• With a Price to Book ratio of 8.63, which is 1.41x 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 Price to Sales ratio of 3.91, which is 2.25x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The Return on Equity (ROE) of 6.19% is 0.94% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.91x above the industry average, implying stronger profitability and robust cash flow generation.

• 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.

• The company's revenue growth of 11.04% exceeds the industry average of 7.83%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.

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 comparing Amazon.com with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

• 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 generating significant 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 compared to its industry peers.

This article was generated by Benzinga's automated content engine and reviewed by an editor.