In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com AMZN against its key competitors in the Broadline Retail industry. By analyzing important 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 | 33.89 | 6.95 | 3.15 | 7.34% | $38.55 | $88.9 | 10.49% |
| Alibaba Group Holding Ltd | 17.39 | 2.07 | 2.15 | 5.01% | $59.0 | $117.63 | 7.61% |
| PDD Holdings Inc | 9.99 | 3.44 | 2.85 | 9.28% | $32.41 | $62.81 | 24.45% |
| MercadoLibre Inc | 60.52 | 26.58 | 5.57 | 15.3% | $0.96 | $2.75 | 37.42% |
| JD.com Inc | 8.92 | 1.45 | 0.32 | 4.21% | $12.54 | $53.12 | 13.37% |
| Coupang Inc | 294.38 | 10.39 | 1.42 | 3.76% | $0.44 | $2.49 | 21.4% |
| eBay Inc | 17.01 | 6.07 | 3.27 | 12.84% | $0.76 | $1.86 | 0.66% |
| Vipshop Holdings Ltd | 6.97 | 1.29 | 0.50 | 6.31% | $3.29 | $7.63 | -4.18% |
| Ollie's Bargain Outlet Holdings Inc | 32.66 | 3.81 | 2.87 | 4.14% | $0.1 | $0.27 | 2.79% |
| Dillard's Inc | 9.32 | 3 | 0.84 | 11.4% | $0.31 | $0.74 | -4.97% |
| MINISO Group Holding Ltd | 15.27 | 3.82 | 2.35 | 8.12% | $0.99 | $2.22 | 22.68% |
| Nordstrom Inc | 13.84 | 3.53 | 0.27 | 15.61% | $0.44 | $1.69 | -2.17% |
| Macy's Inc | 5.52 | 0.70 | 0.14 | 7.86% | $0.68 | $3.02 | -4.39% |
| Savers Value Village Inc | 54.71 | 3.48 | 1.01 | -0.44% | $0.04 | $0.22 | 5.02% |
| Kohl's Corp | 6.96 | 0.20 | 0.05 | 1.26% | $0.31 | $1.92 | -9.39% |
| Hour Loop Inc | 63.55 | 8.66 | 0.32 | -25.78% | $-0.0 | $0.02 | -8.51% |
| Average | 41.13 | 5.23 | 1.6 | 5.26% | $7.48 | $17.23 | 6.79% |
When analyzing Amazon.com, the following trends become evident:
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With a Price to Earnings ratio of 33.89, which is 0.82x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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With a Price to Book ratio of 6.95, which is 1.33x 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.
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The Price to Sales ratio of 3.15, which is 1.97x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 7.34% that is 2.08% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.15x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $88.9 Billion, which indicates 5.16x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 10.49% is notably higher compared to the industry average of 6.79%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative 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.
When evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.46.
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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, 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, gross profit, and revenue growth reflect strong financial performance relative to industry peers, highlighting its efficiency and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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