Investigating Amazon.com's Standing In Broadline Retail Industry Compared To Competitors

In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com AMZN in relation to its major competitors in the Broadline Retail industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight 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.

Through a detailed examination of Amazon.com, we can deduce the following trends:

• At 35.06, the stock's Price to Earnings ratio is 0.94x less than the industry average, suggesting favorable growth potential.

• With a Price to Book ratio of 7.19, which is 1.41x 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.

• The Price to Sales ratio of 3.26, which is 1.98x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The company has a higher Return on Equity (ROE) of 7.34%, which is 0.1% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion is 5.27x above the industry average, highlighting stronger profitability and robust cash flow generation.

• Compared to its industry, the company has higher gross profit of $37.37 Billion, which indicates 2.31x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• With a revenue growth of 10.49%, which is much lower than the industry average of 27.94%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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.

By evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:

• 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 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 overvaluation relative to industry peers. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com demonstrates strong performance compared to industry peers, reflecting favorable operational efficiency and growth prospects.

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