Understanding Amazon.com's Position In Broadline Retail Industry Compared To Competitors

In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com AMZN against its key competitors in the Broadline Retail industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within 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 53.08 9.10 3.39 4.98% $25.31 $27.94 -15.68%
Alibaba Group Holding Ltd 14.61 1.36 1.57 1.41% $37.55 $104.13 5.08%
PDD Holdings Inc 23.58 7.20 5.72 13.33% $26.88 $53.8 123.21%
MercadoLibre Inc 76.13 25.35 5.52 10.65% $0.67 $2.02 36.0%
JD.com Inc 15.13 1.52 0.34 1.47% $4.23 $43.5 3.6%
Coupang Inc 31.32 9.65 1.55 0.12% $0.18 $1.93 22.63%
eBay Inc 10.05 4.06 2.61 6.91% $0.68 $1.86 1.83%
Vipshop Holdings Ltd 7.82 1.65 0.56 8.35% $3.79 $8.23 9.18%
MINISO Group Holding Ltd 24.50 6.06 3.99 7.16% $0.82 $1.66 54.0%
Dillard's Inc 9.46 4.05 1.02 14.27% $0.36 $0.81 -0.17%
Macy's Inc 51.18 1.29 0.23 -1.69% $0.16 $3.3 -2.42%
Ollie's Bargain Outlet Holdings Inc 26.96 3.20 2.32 5.19% $0.11 $0.26 18.04%
Nordstrom Inc 24.74 3.91 0.23 16.99% $0.46 $1.6 2.34%
Savers Value Village Inc 50.44 7.38 1.79 12.73% $0.06 $0.22 4.35%
Kohl's Corp 8.41 0.68 0.15 4.87% $0.49 $2.1 -1.05%
D-MARKET Electronic Services & Trading 220.25 4.93 0.46 -16.51% $0.83 $4.26 30.58%
Average 39.64 5.49 1.87 5.68% $5.15 $15.31 20.48%

When analyzing Amazon.com, the following trends become evident:

  • The current Price to Earnings ratio of 53.08 is 1.34x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

  • With a Price to Book ratio of 9.1, which is 1.66x 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.

  • With a relatively high Price to Sales ratio of 3.39, which is 1.81x the industry average, the stock might be considered overvalued based on sales performance.

  • The Return on Equity (ROE) of 4.98% is 0.7% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

  • The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $25.31 Billion, which is 4.91x above the industry average, implying stronger profitability and robust cash flow generation.

  • With higher gross profit of $27.94 Billion, which indicates 1.82x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

  • The company is witnessing a substantial decline in revenue growth, with a rate of -15.68% compared to the industry average of 20.48%, which indicates a challenging sales environment.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its 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.

By evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:

  • When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.

  • This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.62, which can be perceived as a positive aspect by investors.

Key Takeaways

For PE, PB, and PS ratios, Amazon.com is considered overvalued compared to its peers in the Broadline Retail industry. This is indicated by the high PE, PB, and PS ratios. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com shows lower performance compared to its industry peers. The low ROE and revenue growth, along with high EBITDA and gross profit, suggest potential challenges for Amazon.com in the Broadline Retail sector.

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

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