In-Depth Analysis: Amazon.com Versus Competitors In Broadline Retail Industry

In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com AMZN against its key competitors in the Broadline Retail industry. By analyzing important 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 meticulous analysis of Amazon.com, we can observe the following trends:

• With a Price to Earnings ratio of 36.03, which is 0.98x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 7.38 which exceeds the industry average by 1.33x.

• The stock's relatively high Price to Sales ratio of 3.35, surpassing the industry average by 2.04x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 7.34% that is 1.58% 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 $38.55 Billion, which is 5.62x above the industry average, the company demonstrates 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 is witnessing a substantial decline in revenue growth, with a rate of 10.49% compared to the industry average of 22.22%, which indicates a challenging sales environment.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

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 comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.

• 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 0.46.

Key Takeaways

For the PE, PB, and PS ratios, Amazon.com is considered to have a low PE ratio, indicating potential undervaluation compared to its peers. However, its high PB and PS ratios suggest that the market values the company's assets and sales more highly. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com shows lower profitability and growth compared to its industry peers, which may impact its overall valuation within the Broadline Retail sector.

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