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 | 32.74 | 6.86 | 3.45 | 5.68% | $36.48 | $78.69 | 7.73% |
| Alibaba Group Holding Ltd | 15.68 | 1.98 | 2.04 | 1.23% | $21.8 | $90.83 | 6.57% |
| PDD Holdings Inc | 11.79 | 3.40 | 2.90 | 4.59% | $16.09 | $54.73 | 10.21% |
| MercadoLibre Inc | 58.45 | 24.07 | 5.38 | 10.56% | $0.92 | $2.77 | 36.97% |
| Coupang Inc | 205.29 | 11.94 | 1.70 | 2.53% | $0.36 | $2.32 | 11.16% |
| JD.com Inc | 7.52 | 1.36 | 0.28 | 4.6% | $14.27 | $47.85 | 15.78% |
| eBay Inc | 20.39 | 8.83 | 4.21 | 7.59% | $0.65 | $1.95 | 6.14% |
| Ollie's Bargain Outlet Holdings Inc | 42.48 | 4.90 | 3.65 | 2.78% | $0.07 | $0.24 | 13.35% |
| Vipshop Holdings Ltd | 7.81 | 1.39 | 0.54 | 4.85% | $2.45 | $6.08 | -4.98% |
| Dillard's Inc | 12.97 | 3.94 | 1.14 | 8.97% | $0.26 | $0.69 | -1.64% |
| MINISO Group Holding Ltd | 16.91 | 3.83 | 2.34 | 3.98% | $0.65 | $1.96 | 18.89% |
| Macy's Inc | 6.24 | 0.75 | 0.15 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 57.35 | 4.21 | 1.19 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 9.84 | 0.32 | 0.07 | -0.4% | $0.23 | $1.4 | -4.41% |
| Hour Loop Inc | 172.20 | 10.41 | 0.43 | 11.93% | $0.0 | $0.01 | 4.68% |
| Average | 46.07 | 5.81 | 1.86 | 4.9% | $4.15 | $15.22 | 8.32% |
By closely studying Amazon.com, we can observe the following trends:
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The Price to Earnings ratio of 32.74 is 0.71x lower than the industry average, indicating potential undervaluation for the stock.
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The elevated Price to Book ratio of 6.86 relative to the industry average by 1.18x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.45, which is 1.85x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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With a Return on Equity (ROE) of 5.68% that is 0.78% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion, which is 8.79x above the industry average, implying stronger profitability and robust cash flow generation.
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The company has higher gross profit of $78.69 Billion, which indicates 5.17x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 7.73% is significantly lower compared to the industry average of 8.32%. This indicates a potential fall in the company's sales performance.
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.
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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Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.4.
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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, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers in the Broadline Retail industry. However, the high ROE, EBITDA, gross profit, and low revenue growth suggest that the company is performing well financially and efficiently utilizing its resources. Overall, Amazon.com appears to be a strong player in the industry with solid financial performance and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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