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 | 30.73 | 6.55 | 3.12 | 5.79% | $36.48 | $78.69 | 8.62% |
| Alibaba Group Holding Ltd | 17.98 | 2.14 | 2.23 | 5.01% | $59.0 | $117.63 | 7.61% |
| PDD Holdings Inc | 10.47 | 3.60 | 2.99 | 9.28% | $32.41 | $62.81 | 24.45% |
| MercadoLibre Inc | 60.02 | 26.36 | 5.52 | 15.3% | $0.96 | $2.75 | 37.42% |
| JD.com Inc | 9.16 | 1.49 | 0.33 | 4.21% | $12.54 | $53.12 | 13.37% |
| Coupang Inc | 190 | 11.05 | 1.57 | 2.53% | $0.36 | $2.32 | 11.16% |
| eBay Inc | 16.77 | 6.49 | 3.31 | 9.95% | $0.77 | $1.86 | 1.13% |
| Vipshop Holdings Ltd | 7.19 | 1.33 | 0.51 | 6.31% | $3.29 | $7.63 | -4.18% |
| Ollie's Bargain Outlet Holdings Inc | 34.19 | 4 | 3 | 4.14% | $0.1 | $0.27 | 2.79% |
| Dillard's Inc | 9.59 | 3.09 | 0.86 | 11.4% | $0.31 | $0.74 | -4.97% |
| MINISO Group Holding Ltd | 15.29 | 3.82 | 2.36 | 8.12% | $0.99 | $2.22 | 22.68% |
| Nordstrom Inc | 13.94 | 3.56 | 0.27 | 15.61% | $0.44 | $1.69 | -2.17% |
| Macy's Inc | 5.60 | 0.71 | 0.14 | 7.86% | $0.68 | $3.02 | -4.39% |
| Savers Value Village Inc | 80.71 | 4.30 | 1.21 | -1.13% | $0.03 | $0.2 | 4.51% |
| Kohl's Corp | 6.65 | 0.19 | 0.05 | 1.26% | $0.31 | $1.92 | -9.39% |
| Hour Loop Inc | 60.50 | 8.24 | 0.31 | -25.78% | $-0.0 | $0.02 | -8.51% |
| Average | 35.87 | 5.36 | 1.64 | 4.94% | $7.48 | $17.21 | 6.1% |
Upon a comprehensive analysis of Amazon.com, the following trends can be discerned:
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With a Price to Earnings ratio of 30.73, which is 0.86x 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 6.55, which is 1.22x 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 stock's relatively high Price to Sales ratio of 3.12, surpassing the industry average by 1.9x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a higher Return on Equity (ROE) of 5.79%, which is 0.85% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion, which is 4.88x above the industry average, indicating stronger profitability and robust cash flow generation.
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The company has higher gross profit of $78.69 Billion, which indicates 4.57x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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With a revenue growth of 8.62%, which surpasses the industry average of 6.1%, the company is demonstrating robust sales expansion and gaining market share.
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 considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:
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Compared to its top 4 peers, Amazon.com has a stronger financial position indicated by its lower debt-to-equity ratio of 0.44.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute 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 outperform its industry peers, reflecting strong financial performance and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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