In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Amazon.com AMZN alongside its primary competitors in the Broadline Retail industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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 | 33.94 | 6.97 | 3.15 | 7.34% | $38.55 | $88.9 | 10.49% |
| Alibaba Group Holding Ltd | 17.31 | 2.06 | 2.14 | 5.01% | $59.0 | $117.63 | 7.61% |
| PDD Holdings Inc | 9.89 | 3.33 | 2.82 | 9.28% | $29.18 | $59.65 | 11.33% |
| MercadoLibre Inc | 58.59 | 25.73 | 5.39 | 15.3% | $0.96 | $2.75 | 37.42% |
| JD.com Inc | 8.87 | 1.44 | 0.32 | 4.21% | $12.54 | $53.12 | 13.37% |
| Coupang Inc | 292.75 | 10.34 | 1.41 | 3.76% | $0.44 | $2.49 | 21.4% |
| eBay Inc | 16.79 | 5.99 | 3.23 | 12.84% | $0.76 | $1.86 | 0.66% |
| Vipshop Holdings Ltd | 6.94 | 1.28 | 0.50 | 6.31% | $3.29 | $7.63 | -4.18% |
| Ollie's Bargain Outlet Holdings Inc | 33.29 | 3.89 | 2.92 | 4.14% | $0.1 | $0.27 | 2.79% |
| MINISO Group Holding Ltd | 15.29 | 3.82 | 2.36 | 8.12% | $0.99 | $2.22 | 22.68% |
| Dillard's Inc | 9.23 | 2.97 | 0.83 | 11.4% | $0.31 | $0.74 | -4.97% |
| Nordstrom Inc | 13.89 | 3.54 | 0.27 | 15.61% | $0.44 | $1.69 | -2.17% |
| Macy's Inc | 5.60 | 0.71 | 0.14 | 7.86% | $0.68 | $3.02 | -4.39% |
| Savers Value Village Inc | 56.06 | 3.56 | 1.03 | -0.44% | $0.04 | $0.22 | 5.02% |
| Kohl's Corp | 7.12 | 0.20 | 0.05 | 1.26% | $0.31 | $1.92 | -9.39% |
| Hour Loop Inc | 67.50 | 9.20 | 0.34 | -25.78% | $-0.0 | $0.02 | -8.51% |
| Average | 41.27 | 5.2 | 1.58 | 5.26% | $7.27 | $17.02 | 5.91% |
By conducting a comprehensive analysis of Amazon.com, the following trends become evident:
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With a Price to Earnings ratio of 33.94, which is 0.82x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 6.97 which exceeds the industry average by 1.34x.
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With a relatively high Price to Sales ratio of 3.15, which is 1.99x the industry average, the stock might be considered overvalued based on sales performance.
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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.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.3x above the industry average, implying stronger profitability and robust cash flow generation.
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The company has higher gross profit of $88.9 Billion, which indicates 5.22x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 10.49% exceeds the industry average of 5.91%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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:
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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.
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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 in the Broadline Retail industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting a premium valuation based on book value and sales. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms its industry peers, reflecting strong profitability and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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