Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in comparison to its major competitors within the Broadline Retail industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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 | 33.90 | 7.11 | 3.58 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 21.86 | 3.08 | 3.23 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.56 | 3.78 | 3.48 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 55.49 | 19.94 | 4.73 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 94.96 | 11.27 | 5.92 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 162.80 | 12.67 | 1.87 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 10.03 | 1.60 | 0.31 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 19.64 | 8.51 | 4.06 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 10.91 | 1.81 | 0.71 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 17.22 | 5.08 | 1.50 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 37.45 | 4.44 | 3.27 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 20.58 | 4.36 | 2.59 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 10.34 | 1.10 | 0.22 | 1.95% | $0.36 | $2.1 | -1.9% |
| Savers Value Village Inc | 65.70 | 4.83 | 1.36 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.83 | 0.47 | 0.12 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 95 | 13.99 | 0.72 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 43.02 | 6.46 | 2.27 | 5.5% | $6.19 | $16.6 | 10.76% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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The stock's Price to Earnings ratio of 33.9 is lower than the industry average by 0.79x, suggesting potential value in the eyes of market participants.
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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 7.11 which exceeds the industry average by 1.1x.
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The Price to Sales ratio of 3.58, which is 1.58x 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 Return on Equity (ROE) of 5.68% is 0.18% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion is 5.91x above the industry average, highlighting stronger profitability and robust cash flow generation.
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With higher gross profit of $86.89 Billion, which indicates 5.23x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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With a revenue growth of 13.33%, which surpasses the industry average of 10.76%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage 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.
When comparing Amazon.com with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:
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Compared to its top 4 peers, Amazon.com has a stronger financial position indicated by its lower debt-to-equity ratio of 0.4.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute 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. 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.
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