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.
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 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 | 62.02 | 9.26 | 3.28 | 5.52% | $28.22 | $29.27 | 13.91% |
| Alibaba Group Holding Ltd | 13.33 | 1.28 | 1.43 | 1.41% | $37.55 | $104.13 | 5.08% |
| PDD Holdings Inc | 26.62 | 6.90 | 6.20 | 10.11% | $19.17 | $42.01 | 93.89% |
| MercadoLibre Inc | 78.27 | 25.15 | 5.37 | 5.68% | $0.45 | $1.96 | 41.94% |
| JD.com Inc | 12.90 | 1.33 | 0.29 | 1.47% | $4.23 | $43.5 | 23.57% |
| Coupang Inc | 23.48 | 7.72 | 1.30 | 29.43% | $0.26 | $1.68 | 23.16% |
| eBay Inc | 9.97 | 4.21 | 2.74 | 11.78% | $1.34 | $1.85 | 2.07% |
| Vipshop Holdings Ltd | 8.23 | 1.74 | 0.59 | 8.35% | $3.79 | $8.23 | 52.31% |
| Dillard's Inc | 10.24 | 4.38 | 1.10 | 14.27% | $0.33 | $0.81 | 43.52% |
| MINISO Group Holding Ltd | 23.27 | 5.35 | 3.67 | 7.0% | $0.86 | $1.58 | 36.74% |
| Macy's Inc | 52.24 | 1.32 | 0.23 | -1.69% | $0.16 | $3.3 | -2.42% |
| Ollie's Bargain Outlet Holdings Inc | 26.99 | 3.22 | 2.33 | 5.19% | $0.11 | $0.26 | 18.04% |
| Nordstrom Inc | 24.29 | 3.84 | 0.22 | 16.99% | $0.46 | $1.6 | 2.34% |
| Kohl's Corp | 9.98 | 0.81 | 0.18 | 4.87% | $0.49 | $2.1 | -1.05% |
| Savers Value Village Inc | 55.65 | 8.12 | 1.97 | 12.73% | $0.06 | $0.22 | 4.35% |
| D-MARKET Electronic Services & Trading | 12.53 | 4.30 | 0.73 | -5.6% | $0.79 | $2.41 | 52.02% |
| Average | 25.87 | 5.31 | 1.89 | 8.13% | $4.67 | $14.38 | 26.37% |
By carefully studying Amazon.com, we can deduce the following trends:
The Price to Earnings ratio of 62.02 for this company is 2.4x above the industry average, indicating a premium valuation associated with the stock.
With a Price to Book ratio of 9.26, which is 1.74x 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.
The Price to Sales ratio of 3.28, which is 1.74x 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 2.61% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $28.22 Billion, which is 6.04x above the industry average, indicating stronger profitability and robust cash flow generation.
The gross profit of $29.27 Billion is 2.04x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
The company's revenue growth of 13.91% is significantly lower compared to the industry average of 26.37%. This indicates a potential fall in the company's sales performance.
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.
By evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.67.
This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For Amazon.com in the Broadline Retail industry, the PE, PB, and PS ratios are all high compared to its peers, indicating potentially overvalued stock. The low ROE suggests lower profitability compared to industry peers. The high EBITDA and gross profit signify strong operational performance, while the low revenue growth implies slower expansion compared to 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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