Competitor Analysis: Evaluating Amazon.com And Competitors In Broadline Retail Industry

In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. 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 thorough examination of Amazon.com, we can discern the following trends:

• The stock's Price to Earnings ratio of 36.85 is lower than the industry average by 0.97x, suggesting potential value in the eyes of market participants.

• With a Price to Book ratio of 7.55, which is 1.36x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

• With a relatively high Price to Sales ratio of 3.42, which is 2.11x the industry average, the stock might be considered overvalued based on sales performance.

• The Return on Equity (ROE) of 7.34% is 0.52% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.62x above the industry average, implying stronger profitability and robust cash flow generation.

• With higher gross profit of $37.37 Billion, which indicates 2.47x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 10.49% is significantly lower compared to the industry average of 15.06%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.

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:

• 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 0.46, which can be perceived as a positive aspect by investors.

Key Takeaways

For Amazon.com in the Broadline Retail industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting a premium valuation based on assets and sales. In terms of ROE, Amazon.com shows lower profitability compared to peers. However, its high EBITDA and gross profit margins indicate strong operational performance. The low revenue growth rate may raise concerns about future prospects relative to industry peers.

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