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

In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. 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.

Upon closer analysis of Amazon.com, the following trends become apparent:

• A Price to Earnings ratio of 33.5 significantly below the industry average by 0.77x suggests undervaluation. This can make the stock appealing for those seeking growth.

• The elevated Price to Book ratio of 7.14 relative to the industry average by 1.31x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 3.4, surpassing the industry average by 1.95x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 5.79% that is 1.03% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion, which is 5.33x above the industry average, implying stronger profitability and robust cash flow generation.

• With higher gross profit of $78.69 Billion, which indicates 4.56x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• With a revenue growth of 8.62%, which surpasses the industry average of -1.38%, the company is demonstrating robust sales expansion and gaining market share.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared 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 examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

• Amazon.com exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.44.

• This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for 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 outperform its industry peers, reflecting strong financial performance and growth potential.

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