Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com AMZN in comparison to its major competitors within the Broadline Retail industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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 | 37.18 | 7.92 | 3.77 | 5.79% | $36.48 | $78.69 | 8.62% |
| Alibaba Group Holding Ltd | 16.41 | 2.08 | 2.13 | 1.23% | $21.8 | $90.83 | 6.57% |
| PDD Holdings Inc | 12.69 | 3.66 | 3.13 | 4.59% | $16.09 | $54.73 | 10.21% |
| MercadoLibre Inc | 58.90 | 24.26 | 5.42 | 10.56% | $0.92 | $2.77 | 36.97% |
| Coupang Inc | 218.14 | 12.68 | 1.80 | 2.53% | $0.36 | $2.32 | 11.16% |
| JD.com Inc | 8.25 | 1.50 | 0.31 | 4.6% | $14.27 | $47.85 | 15.78% |
| eBay Inc | 19.69 | 7.63 | 3.89 | 9.95% | $0.77 | $1.86 | 1.13% |
| Vipshop Holdings Ltd | 8.50 | 1.51 | 0.59 | 4.85% | $2.45 | $6.08 | -4.98% |
| Ollie's Bargain Outlet Holdings Inc | 40.60 | 4.68 | 3.48 | 2.78% | $0.07 | $0.24 | 13.35% |
| Dillard's Inc | 13.69 | 4.16 | 1.21 | 8.97% | $0.26 | $0.69 | -1.64% |
| MINISO Group Holding Ltd | 15.99 | 3.62 | 2.21 | 3.98% | $0.65 | $1.96 | 18.89% |
| Macy's Inc | 6.45 | 0.78 | 0.16 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 74.50 | 3.91 | 1.11 | -1.13% | $0.03 | $0.2 | 4.51% |
| Kohl's Corp | 11.28 | 0.36 | 0.09 | -0.4% | $0.23 | $1.4 | -4.41% |
| Hour Loop Inc | 194 | 11.73 | 0.49 | 11.93% | $0.0 | $0.01 | 4.68% |
| Average | 49.93 | 5.9 | 1.86 | 4.66% | $4.16 | $15.21 | 7.72% |
After examining Amazon.com, the following trends can be inferred:
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A Price to Earnings ratio of 37.18 significantly below the industry average by 0.74x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The elevated Price to Book ratio of 7.92 relative to the industry average by 1.34x suggests company might be overvalued based on its book value.
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The stock's relatively high Price to Sales ratio of 3.77, surpassing the industry average by 2.03x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 5.79% is 1.13% 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 8.77x above the industry average, highlighting stronger profitability and robust cash flow generation.
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The gross profit of $78.69 Billion is 5.17x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 8.62%, outperforming the industry average of 7.72%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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:
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When comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.44.
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. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms 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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