In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com AMZN in comparison to its major competitors within the Broadline Retail industry. By analyzing crucial 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 | 48.09 | 9.13 | 3.88 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.65 | 1.55 | 1.60 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 9.98 | 3.66 | 2.90 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 61.36 | 21.91 | 4.80 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.76 | 1.68 | 0.37 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 40.08 | 9.79 | 1.42 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.03 | 5.62 | 3.16 | 11.59% | $0.95 | $1.85 | 3.04% |
| MINISO Group Holding Ltd | 24.47 | 5.78 | 3.99 | 6.68% | $0.88 | $2.03 | 19.29% |
| Vipshop Holdings Ltd | 6.54 | 1.36 | 0.49 | 2.76% | $1.47 | $4.96 | -9.18% |
| Ollie's Bargain Outlet Holdings Inc | 34.99 | 4.46 | 3.22 | 2.24% | $0.06 | $0.21 | 7.79% |
| Dillard's Inc | 11.45 | 3.60 | 1.07 | 6.37% | $0.21 | $0.63 | -3.53% |
| Macy's Inc | 27.30 | 1.11 | 0.20 | 0.66% | $0.29 | $2.04 | -3.79% |
| Nordstrom Inc | 15.30 | 4.04 | 0.27 | 4.75% | $0.3 | $1.31 | 4.34% |
| Savers Value Village Inc | 22.70 | 3.86 | 1.15 | 5.09% | $0.07 | $0.22 | 0.53% |
| Kohl's Corp | 6.44 | 0.42 | 0.10 | 0.58% | $0.28 | $1.57 | -8.49% |
| Groupon Inc | 16.30 | 11.19 | 0.84 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.49 | 5.34 | 1.71 | 7.12% | $6.98 | $14.45 | 7.84% |
By closely examining Amazon.com, we can identify the following trends:
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The current Price to Earnings ratio of 48.09 is 2.24x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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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 9.13 which exceeds the industry average by 1.71x.
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With a relatively high Price to Sales ratio of 3.88, which is 2.27x 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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Compared to its industry, the company has higher gross profit of $31.0 Billion, which indicates 2.15x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 11.04%, outperforming the industry average of 7.84%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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 analyzing Amazon.com in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.52, which can be perceived as a positive aspect by investors.
Key Takeaways
For PE, PB, and PS ratios, Amazon.com is considered overvalued compared to its peers in the Broadline Retail industry. This is indicated by the high PE, PB, and PS ratios. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com's performance is relatively weaker compared to its industry peers. The low ROE suggests lower profitability, while the high EBITDA, gross profit, and revenue growth indicate strong operational performance and growth potential.
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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