Competitor Analysis: Evaluating Amazon.com And 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.

Through a meticulous analysis of Amazon.com, we can observe the following trends:

• At 44.48, the stock's Price to Earnings ratio significantly exceeds the industry average by 2.03x, suggesting a premium valuation relative to industry peers.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 8.45 which exceeds the industry average by 1.69x.

• The stock's relatively high Price to Sales ratio of 3.59, surpassing the industry average by 2.04x, may indicate an aspect of overvaluation in terms of sales performance.

• The Return on Equity (ROE) of 6.19% is 0.42% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

• Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.61x above the industry average, indicating stronger profitability and robust cash flow generation.

• With higher gross profit of $31.0 Billion, which indicates 1.91x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 11.04% is significantly below the industry average of 13.42%. This suggests a potential struggle in generating increased sales volume.

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.

In terms of the Debt-to-Equity ratio, Amazon.com stands in comparison with its top 4 peers, leading to the following comparisons:

• 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 0.52.

Key Takeaways

For Amazon.com, the PE, PB, and PS ratios are all high compared to its peers in the Broadline Retail industry, indicating overvaluation. The low ROE suggests lower profitability compared to industry peers. Amazon.com's high EBITDA and gross profit reflect strong operational performance, while the low revenue growth implies slower expansion compared to industry counterparts.

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