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 (NASDAQ: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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amazon.com Inc | 35.21 | 7.38 | 3.71 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 16.38 | 2.07 | 2.13 | 1.23% | $21.8 | $90.83 | 6.57% |
| PDD Holdings Inc | 12.30 | 3.55 | 3.03 | 4.59% | $16.09 | $54.73 | 10.21% |
| MercadoLibre Inc | 57.29 | 20.59 | 4.88 | 9.76% | $0.95 | $3.09 | 33.85% |
| Coupang Inc | 141.65 | 11.02 | 1.63 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 7.69 | 1.39 | 0.29 | 4.6% | $14.27 | $47.85 | 15.78% |
| eBay Inc | 21.88 | 9.48 | 4.52 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 9.33 | 1.62 | 0.61 | 4.85% | $2.45 | $6.08 | -4.98% |
| Ollie's Bargain Outlet Holdings Inc | 40.58 | 4.68 | 3.48 | 2.78% | $0.07 | $0.24 | 13.35% |
| Dillard's Inc | 13.81 | 4.19 | 1.22 | 8.97% | $0.26 | $0.69 | -1.64% |
| MINISO Group Holding Ltd | 17.79 | 4.03 | 2.46 | 3.98% | $0.65 | $1.96 | 18.89% |
| Macy's Inc | 6.55 | 0.79 | 0.16 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 55.50 | 4.08 | 1.15 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 13.27 | 0.43 | 0.10 | -0.4% | $0.23 | $1.4 | -4.41% |
| Hour Loop Inc | 59 | 8.69 | 0.45 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 33.79 | 5.47 | 1.86 | 5.15% | $4.15 | $15.26 | 7.89% |
After thoroughly examining Amazon.com, the following trends can be inferred:
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Notably, the current Price to Earnings ratio for this stock, 35.21, is 1.04x above the industry norm, reflecting a higher valuation relative to the industry.
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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 1.35x.
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The Price to Sales ratio of 3.71, which is 1.99x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The company has a higher Return on Equity (ROE) of 5.68%, which is 0.53% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 8.82x above the industry average, indicating stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $86.89 Billion, which indicates 5.69x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 13.33% is notably higher compared to the industry average of 7.89%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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 analyzing Amazon.com in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.4, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For Amazon.com, the PE, PB, and PS ratios are all high compared to its peers in the Broadline Retail industry, indicating a potentially overvalued stock. On the other hand, Amazon.com shows high ROE, EBITDA, gross profit, and revenue growth, suggesting strong operational performance and growth potential relative to industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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