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 74% of total, followed by Amazon Web Services (17%), and advertising services (9%). International segments constitute 22% of Amazon's total revenue, led by Germany, the United Kingdom, and Japan.

When conducting a detailed analysis of Amazon.com, the following trends become clear:

• At 33.77, the stock's Price to Earnings ratio is 0.37x less than the industry average, suggesting favorable growth potential.

• The elevated Price to Book ratio of 6.92 relative to the industry average by 1.32x suggests company might be overvalued based on its book value.

• With a relatively high Price to Sales ratio of 3.74, which is 1.65x the industry average, the stock might be considered overvalued based on sales performance.

• With a Return on Equity (ROE) of 6.02% that is 1.78% 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 $45.5 Billion, which is 10.46x above the industry average, implying stronger profitability and robust cash flow generation.

• With higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• With a revenue growth of 13.4%, which is much lower than the industry average of 14.41%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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 assessing Amazon.com against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.

• With a lower debt-to-equity ratio of 0.37, 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 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, and gross profit reflect strong profitability and operational efficiency. However, the low revenue growth rate may raise concerns about future performance compared to industry peers.

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