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 (NASDAQ: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.

Through a detailed examination of Amazon.com, we can deduce the following trends:

• The current Price to Earnings ratio of 48.31 is 2.22x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• The elevated Price to Book ratio of 9.17 relative to the industry average by 1.66x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 3.89, surpassing the industry average by 2.24x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 6.19% that is 1.18% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

• With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.59x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

• With higher gross profit of $31.0 Billion, which indicates 2.14x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 11.04% exceeds the industry average of 8.17%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.

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:

• Amazon.com exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.52.

• This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.

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. The low ROE suggests that Amazon.com is not generating strong returns on shareholder equity. However, the high EBITDA, gross profit, and revenue growth show that the company is performing well in terms of profitability and revenue generation compared to its industry peers.

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