Market Analysis: Amazon.com And Competitors In Broadline Retail Industry

In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com AMZN and its primary competitors in the Broadline Retail industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within 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:

• A Price to Earnings ratio of 33.08 significantly below the industry average by 0.78x suggests undervaluation. This can make the stock appealing for those seeking growth.

• With a Price to Book ratio of 7.05, which is 1.27x 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 3.36, which is 1.83x 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 5.79% that is 0.22% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion, which is 4.54x above the industry average, implying stronger profitability and robust cash flow generation.

• With higher gross profit of $78.69 Billion, which indicates 4.41x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 8.62% is notably higher compared to the industry average of 4.66%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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 examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

• Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.44.

• 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 the company's assets and sales highly. In terms of ROE, Amazon.com's performance is lower than its industry peers, reflecting less efficient use of shareholder equity. However, the high EBITDA, gross profit, and revenue growth signify strong operational and financial performance relative to competitors in the industry.

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