In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 | 33.50 | 7.14 | 3.40 | 5.79% | $36.48 | $78.69 | 8.62% |
| Alibaba Group Holding Ltd | 15.75 | 1.99 | 2.05 | 1.23% | $59.0 | $117.63 | -15.6% |
| PDD Holdings Inc | 10.57 | 3.05 | 2.60 | 4.59% | $16.09 | $54.73 | 10.21% |
| MercadoLibre Inc | 62.62 | 25.79 | 5.77 | 10.56% | $0.92 | $2.77 | 36.97% |
| Coupang Inc | 199.21 | 11.58 | 1.65 | 2.53% | $0.36 | $2.32 | 11.16% |
| JD.com Inc | 8.05 | 1.46 | 0.30 | 4.6% | $14.27 | $47.85 | 15.78% |
| eBay Inc | 17.49 | 6.77 | 3.46 | 9.95% | $0.77 | $1.86 | 1.13% |
| Vipshop Holdings Ltd | 7.31 | 1.30 | 0.50 | 4.85% | $2.45 | $6.08 | -4.98% |
| Ollie's Bargain Outlet Holdings Inc | 34.60 | 4.05 | 3.04 | 4.14% | $0.1 | $0.27 | 2.79% |
| Dillard's Inc | 11.14 | 3.38 | 0.98 | 8.97% | $0.31 | $0.74 | -24.6% |
| MINISO Group Holding Ltd | 16.02 | 3.64 | 2.22 | 3.98% | $0.65 | $1.96 | 18.89% |
| Macy's Inc | 6.03 | 0.75 | 0.15 | 0.84% | $0.68 | $3.02 | -40.14% |
| Savers Value Village Inc | 72.50 | 3.81 | 1.08 | -1.13% | $0.03 | $0.2 | 4.51% |
| Kohl's Corp | 7.38 | 0.24 | 0.06 | 1.26% | $0.31 | $1.92 | -9.39% |
| Hour Loop Inc | 131 | 7.92 | 0.33 | 11.93% | $0.0 | $0.01 | 4.68% |
| Average | 42.83 | 5.41 | 1.73 | 4.88% | $6.85 | $17.24 | 0.81% |
When analyzing Amazon.com, the following trends become evident:
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At 33.5, the stock's Price to Earnings ratio is 0.78x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 7.14, which is 1.32x 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 3.4, 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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The Return on Equity (ROE) of 5.79% is 0.91% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion is 5.33x above the industry average, highlighting stronger profitability and robust cash flow generation.
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With higher gross profit of $78.69 Billion, which indicates 4.56x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 8.62% is notably higher compared to the industry average of 0.81%, 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.
In terms of the Debt-to-Equity ratio, Amazon.com can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.44.
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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 peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry peers. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com demonstrates strong performance compared to its industry counterparts.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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