Market Analysis: Amazon.com And 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.

Through an analysis of Amazon.com, we can infer the following trends:

• The Price to Earnings ratio of 38.39 is 0.98x lower than the industry average, indicating potential undervaluation for the stock.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 7.87 which exceeds the industry average by 1.37x.

• The Price to Sales ratio of 3.57, which is 2.18x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The company has a lower Return on Equity (ROE) of 7.34%, which is 0.52% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.62x above the industry average, indicating stronger profitability and robust cash flow generation.

• With higher gross profit of $37.37 Billion, which indicates 2.47x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 10.49% is significantly lower compared to the industry average of 15.06%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.

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 evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

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

• The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.46.

Key Takeaways

For Amazon.com, the PE ratio is low compared to its peers, indicating potential undervaluation. The PB ratio is high, suggesting investors are willing to pay a premium for its book value. The PS ratio is also high, reflecting strong sales relative to market value. On the other hand, the low ROE implies lower profitability compared to peers. The high EBITDA and gross profit signify strong operational performance, while the low revenue growth indicates slower expansion compared to industry counterparts in the Broadline Retail sector.

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