Inquiry Into Amazon.com's Competitor Dynamics In Broadline Retail Industry

In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Amazon.com AMZN alongside its primary competitors in the Broadline Retail industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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.

By closely studying Amazon.com, we can observe the following trends:

• The stock's Price to Earnings ratio of 36.39 is lower than the industry average by 0.78x, suggesting potential value in the eyes of market participants.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 7.75 which exceeds the industry average by 1.36x.

• With a relatively high Price to Sales ratio of 3.69, which is 2.05x the industry average, the stock might be considered overvalued based on sales performance.

• The company has a higher Return on Equity (ROE) of 5.79%, which is 1.13% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion, which is 8.77x above the industry average, indicating stronger profitability and robust cash flow generation.

• The company has higher gross profit of $78.69 Billion, which indicates 5.17x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company is experiencing remarkable revenue growth, with a rate of 8.62%, outperforming the industry average of 7.72%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative 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.

By considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:

• Amazon.com is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.44.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.

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. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms 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.