Inquiry Into Amazon.com's Competitor Dynamics In Broadline Retail Industry

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 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.

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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.

By thoroughly analyzing Amazon.com, we can discern the following trends:

• The stock's Price to Earnings ratio of 30.86 is lower than the industry average by 0.87x, suggesting potential value in the eyes of market participants.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 6.32 which exceeds the industry average by 1.41x.

• The Price to Sales ratio of 2.87, which is 2.08x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The company has a higher Return on Equity (ROE) of 7.34%, which is 2.08% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.23x above the industry average, indicating stronger profitability and robust cash flow generation.

• The company has higher gross profit of $88.9 Billion, which indicates 5.46x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company is experiencing remarkable revenue growth, with a rate of 10.49%, outperforming the industry average of 10.33%.

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.

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

• Amazon.com exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.46.

• This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.

Key Takeaways

For Amazon.com, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers in the Broadline Retail industry. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth suggest that Amazon.com is performing exceptionally well and outpacing its industry competitors in terms of profitability and growth potential.

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