20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in comparison to its major competitors within the Broadline Retail industry. By analyzing crucial 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 a leading online retailer and one of the highest-grossing e-commerce aggregators, with $386 billion in net sales and approximately $578 billion in estimated physical/digital online gross merchandise volume in 2021. Retail-related revenue represents approximately 80% of the total, followed by Amazon Web Services' cloud computing, storage, database, and other offerings (10%-15%), advertising services (5%), and other. International segments constitute 25%-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 | 58.55 | 8.74 | 3.10 | 5.52% | $28.22 | $29.27 | 13.91% |
| Alibaba Group Holding Ltd | 13.71 | 1.31 | 1.47 | 1.41% | $37.55 | $104.13 | 5.08% |
| PDD Holdings Inc | 30.80 | 7.98 | 7.17 | 10.11% | $19.17 | $42.01 | 93.89% |
| MercadoLibre Inc | 90.40 | 32.68 | 6.78 | 14.38% | $0.78 | $2.0 | 39.78% |
| JD.com Inc | 11.25 | 1.16 | 0.25 | 3.51% | $11.51 | $38.75 | 1.71% |
| Coupang Inc | 65.67 | 9.62 | 1.22 | 3.2% | $0.2 | $1.57 | 21.21% |
| eBay Inc | 8.56 | 3.75 | 2.28 | 23.37% | $1.76 | $1.79 | 5.04% |
| Vipshop Holdings Ltd | 9.40 | 1.98 | 0.68 | 3.65% | $1.57 | $5.38 | 5.32% |
| Dillard's Inc | 9.18 | 3.79 | 1.03 | 8.82% | $0.24 | $0.67 | -4.38% |
| Macy's Inc | 8 | 1.30 | 0.23 | 1.03% | $0.31 | $2.14 | -7.85% |
| MINISO Group Holding Ltd | 19.47 | 4.48 | 3.07 | 7.0% | $0.86 | $1.58 | 36.74% |
| Ollie's Bargain Outlet Holdings Inc | 30.18 | 3.28 | 2.38 | 2.23% | $0.05 | $0.19 | 14.82% |
| Nordstrom Inc | 27.41 | 4.52 | 0.22 | 9.55% | $0.29 | $1.24 | -6.37% |
| Savers Value Village Inc | 88.87 | 10.12 | 2.14 | -10.39% | $0.03 | $0.23 | 3.81% |
| Qurate Retail Inc | 5.42 | 0.68 | 0.04 | 0.17% | $0.26 | $0.88 | -9.66% |
| D-MARKET Electronic Services & Trading | 11.63 | 3.99 | 0.68 | -5.6% | $0.79 | $2.41 | 52.02% |
| Average | 28.66 | 6.04 | 1.98 | 4.83% | $5.02 | $13.66 | 16.74% |
Through a meticulous analysis of Amazon.com, we can observe the following trends:
At 58.55, the stock's Price to Earnings ratio significantly exceeds the industry average by 2.04x, suggesting a premium valuation relative to industry peers.
The elevated Price to Book ratio of 8.74 relative to the industry average by 1.45x suggests company might be overvalued based on its book value.
The Price to Sales ratio of 3.1, which is 1.57x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
With a Return on Equity (ROE) of 5.52% that is 0.69% 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 $28.22 Billion, which is 5.62x above the industry average, implying stronger profitability and robust cash flow generation.
The gross profit of $29.27 Billion is 2.14x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
With a revenue growth of 13.91%, which is much lower than the industry average of 16.74%, the company is experiencing a notable slowdown in sales expansion.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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.
In terms of the Debt-to-Equity ratio, Amazon.com stands in comparison with its top 4 peers, leading to the following comparisons:
When comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.
The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.67.
Key Takeaways
For the PE, PB, and PS ratios, Amazon.com has high valuations compared to its peers in the Broadline Retail industry. This suggests that investors are willing to pay a premium for Amazon.com's earnings, book value, and sales.
In terms of ROE, EBITDA, and gross profit, Amazon.com performs well with high values. This indicates that the company is efficient in generating profits from its equity, operating income, and sales.
However, Amazon.com's revenue growth is relatively low compared to its industry peers. This suggests that the company may be experiencing slower expansion in its sales compared to its competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
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