Performance Comparison: Amazon.com And Competitors In Broadline Retail Industry

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.

When closely examining Amazon.com, the following trends emerge:

• Notably, the current Price to Earnings ratio for this stock, 47.81, is 2.22x above the industry norm, reflecting a higher valuation relative to the industry.

• The elevated Price to Book ratio of 9.08 relative to the industry average by 1.69x suggests company might be overvalued based on its book value.

• The Price to Sales ratio of 3.85, which is 2.26x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• With a Return on Equity (ROE) of 6.19% that is 0.93% below the industry average, it appears that the company exhibits 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 4.6x above the industry average, indicating stronger profitability and robust cash flow generation.

• 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.

• 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 measures the financial leverage of a company by evaluating its debt relative to its 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 comparing Amazon.com with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

• When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.

• 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 and high EBITDA, gross profit, and revenue growth suggest potential challenges in generating returns and sustaining growth.

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