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.

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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.

After examining Amazon.com, the following trends can be inferred:

• With a Price to Earnings ratio of 31.21, which is 0.81x 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 6.41 which exceeds the industry average by 1.3x.

• The stock's relatively high Price to Sales ratio of 2.9, surpassing the industry average by 1.91x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 7.34% that is 2.08% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.31x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

• With higher gross profit of $88.9 Billion, which indicates 5.23x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 10.49% exceeds the industry average of 4.68%, indicating strong sales performance and market outperformance.

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:

• Amazon.com has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.46.

• This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.

Key Takeaways

For Amazon.com, the PE ratio is low compared to its peers in the Broadline Retail industry, indicating potential undervaluation. The high PB and PS ratios suggest that the market values Amazon.com's assets and sales highly. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth reflect strong financial performance relative to industry peers, indicating efficient operations and growth potential.

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