Comparative Study: Amazon.com And Industry Competitors In Broadline Retail Industry

In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com AMZN against its key competitors in the Broadline Retail industry. By examining key 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.

When conducting a detailed analysis of Amazon.com, the following trends become clear:

• The Price to Earnings ratio of 32.77 is 0.88x 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 6.73 which exceeds the industry average by 1.43x.

• The Price to Sales ratio of 3.05, which is 2.1x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• With a Return on Equity (ROE) of 7.34% that is 2.08% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion is 5.23x above the industry average, highlighting stronger profitability and robust cash flow generation.

• The company has higher gross profit of $88.9 Billion, which indicates 5.46x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 10.49% is notably higher compared to the industry average of 10.33%, showcasing exceptional sales performance and strong demand for its products or services.

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.

By considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:

• In terms of the debt-to-equity ratio, Amazon.com has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.46.

Key Takeaways

For Amazon.com, the PE ratio is low compared to its peers in the Broadline Retail industry, indicating potential undervaluation. The high PB and PS ratios suggest that the market values Amazon.com's assets and sales highly. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth outperform its industry peers, reflecting strong financial performance and growth potential.

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