Assessing Amazon.com's Performance Against Competitors In Broadline Retail Industry

In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Amazon.com AMZN alongside its primary competitors in the Broadline Retail industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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.

By conducting a comprehensive analysis of Amazon.com, the following trends become evident:

• The stock's Price to Earnings ratio of 34.53 is lower than the industry average by 0.77x, 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 7.36 which exceeds the industry average by 1.32x.

• The Price to Sales ratio of 3.5, which is 1.96x 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 1.13% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion is 5.35x above the industry average, highlighting stronger profitability and robust cash flow generation.

• With higher gross profit of $78.69 Billion, which indicates 4.6x 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 6.14%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.

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 light of the Debt-to-Equity ratio, a comparison between Amazon.com and its top 4 peers reveals the following information:

• Amazon.com is in a relatively stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.44.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity.

Key Takeaways

The low P/E ratio suggests Amazon.com may be undervalued compared to its peers in the Broadline Retail industry. A high P/B ratio indicates the market values Amazon.com's assets highly relative to its stock price. The high P/S ratio implies investors are willing to pay a premium for Amazon.com's revenue. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth indicate strong financial performance compared to industry peers.

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