In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) vis-à-vis its key competitors in the Broadline Retail industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal 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 | 33.81 | 7.09 | 3.57 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 20.93 | 2.95 | 3.10 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.37 | 3.73 | 3.44 | 8.89% | $25.79 | $58.13 | 7.14% |
| Sea Ltd | 98.46 | 11.69 | 6.14 | 4.36% | $0.58 | $2.41 | 38.16% |
| MercadoLibre Inc | 54.03 | 19.41 | 4.60 | 9.76% | $0.95 | $3.09 | 33.85% |
| Coupang Inc | 161.85 | 12.60 | 1.86 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.73 | 1.55 | 0.30 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 20.68 | 8.95 | 4.27 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 10.84 | 1.80 | 0.71 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 16.90 | 4.98 | 1.47 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 35.60 | 4.22 | 3.11 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 20.03 | 4.25 | 2.52 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 10.10 | 1.07 | 0.22 | 1.95% | $0.36 | $2.1 | -1.9% |
| Savers Value Village Inc | 63.50 | 4.67 | 1.32 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.53 | 0.45 | 0.11 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 92 | 13.55 | 0.70 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 42.5 | 6.39 | 2.26 | 5.5% | $6.19 | $16.6 | 10.76% |
By conducting an in-depth analysis of Amazon.com, we can identify the following trends:
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The Price to Earnings ratio of 33.81 is 0.8x lower than the industry average, indicating potential undervaluation for the stock.
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With a Price to Book ratio of 7.09, which is 1.11x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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With a relatively high Price to Sales ratio of 3.57, which is 1.58x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 5.68% that is 0.18% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 5.91x above the industry average, implying 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 5.23x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 13.33%, outperforming the industry average of 10.76%.
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.
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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In terms of the debt-to-equity ratio, Amazon.com has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.4.
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.
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