In-Depth Analysis: Amazon.com Versus Competitors In Broadline Retail Industry

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.

By conducting a comprehensive analysis of Amazon.com, the following trends become evident:

• Notably, the current Price to Earnings ratio for this stock, 39.16, is 1.6x above the industry norm, reflecting a higher valuation relative to the industry.

• The elevated Price to Book ratio of 8.03 relative to the industry average by 1.32x suggests company might be overvalued based on its book value.

• The Price to Sales ratio of 3.64, which is 2.09x 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 7.34% is 0.22% above the industry average, highlighting efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion is 5.63x above the industry average, highlighting stronger profitability and robust cash flow generation.

• The gross profit of $37.37 Billion is 2.47x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 10.49% exceeds the industry average of 6.74%, indicating strong sales performance and market outperformance.

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.

In light of the Debt-to-Equity ratio, a comparison between Amazon.com and its top 4 peers reveals the following information:

• When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.

• This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.46, which can be perceived as a positive aspect 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. On the other hand, Amazon.com's high ROE, EBITDA, gross profit, and revenue growth suggest strong financial performance and growth potential relative to industry competitors.

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