Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amazon.com Inc | 48.06 | 9.13 | 3.87 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.03 | 1.50 | 1.54 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 9.87 | 3.62 | 2.87 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 61.03 | 21.79 | 4.77 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.53 | 1.65 | 0.36 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 40.32 | 9.85 | 1.43 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.38 | 5.75 | 3.23 | 11.59% | $0.95 | $1.85 | 3.04% |
| Vipshop Holdings Ltd | 6.51 | 1.35 | 0.49 | 2.76% | $1.47 | $4.96 | -9.18% |
| MINISO Group Holding Ltd | 23.62 | 5.58 | 3.85 | 6.68% | $0.88 | $2.03 | 19.29% |
| Ollie's Bargain Outlet Holdings Inc | 35.10 | 4.47 | 3.23 | 2.24% | $0.06 | $0.21 | 7.79% |
| Dillard's Inc | 11.20 | 3.52 | 1.05 | 6.37% | $0.21 | $0.63 | -3.53% |
| Macy's Inc | 26.62 | 1.09 | 0.20 | 0.66% | $0.29 | $2.04 | -3.79% |
| Nordstrom Inc | 15.53 | 4.10 | 0.27 | 4.75% | $0.3 | $1.31 | 4.34% |
| Savers Value Village Inc | 22.46 | 3.82 | 1.13 | 5.09% | $0.07 | $0.22 | 0.53% |
| Kohl's Corp | 6.38 | 0.41 | 0.09 | 0.58% | $0.28 | $1.57 | -8.49% |
| Groupon Inc | 15.06 | 10.33 | 0.77 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.24 | 5.26 | 1.69 | 7.12% | $6.98 | $14.45 | 7.84% |
Upon analyzing Amazon.com, the following trends can be observed:
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The current Price to Earnings ratio of 48.06 is 2.26x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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The elevated Price to Book ratio of 9.13 relative to the industry average by 1.74x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 3.87, which is 2.29x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 6.19% is 0.93% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.6x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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The gross profit of $31.0 Billion is 2.15x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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With a revenue growth of 11.04%, which surpasses the industry average of 7.84%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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:
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When comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two 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. However, Amazon.com's high EBITDA, gross profit, and revenue growth outperform its competitors, reflecting strong operational performance and growth potential in the industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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