Market Analysis: Amazon.com And Competitors In Broadline Retail Industry

Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com AMZN in comparison to its major competitors within the Broadline Retail industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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.

After examining Amazon.com, the following trends can be inferred:

• The Price to Earnings ratio of 44.55 for this company is 1.83x above the industry average, indicating a premium valuation associated with the stock.

• The elevated Price to Book ratio of 8.29 relative to the industry average by 1.5x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 3.29, surpassing the industry average by 1.73x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 5.95% that is 0.35% 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 $27.87 Billion is 4.03x above the industry average, highlighting stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $28.32 Billion, which indicates 1.74x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 10.12% is significantly lower compared to the industry average of 13.16%. This indicates a potential fall in the company's sales performance.

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.

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

• Amazon.com is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.56.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.

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, and gross profit suggest strong profitability and operational efficiency relative to its industry peers. However, the low revenue growth rate may raise concerns about the company's future performance compared to its competitors in the sector.

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