In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com AMZN against its key competitors in the Broadline Retail industry. By examining key 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 | 34.76 | 7.29 | 3.67 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 16.08 | 2.03 | 2.09 | 1.23% | $21.8 | $90.83 | 6.57% |
| PDD Holdings Inc | 12.76 | 3.68 | 3.14 | 4.59% | $16.09 | $54.73 | 10.21% |
| MercadoLibre Inc | 57.86 | 20.79 | 4.93 | 9.76% | $0.95 | $3.09 | 33.85% |
| Coupang Inc | 144.25 | 11.23 | 1.66 | 0.71% | $0.34 | $2.56 | 16.4% |
| eBay Inc | 22.20 | 9.61 | 4.59 | 7.59% | $0.65 | $1.95 | 6.14% |
| JD.com Inc | 8.79 | 1.40 | 0.27 | 2.68% | $7.34 | $56.64 | 22.4% |
| Vipshop Holdings Ltd | 8.95 | 1.49 | 0.59 | 3.74% | $1.91 | $6.05 | -3.98% |
| Ollie's Bargain Outlet Holdings Inc | 41.70 | 4.81 | 3.58 | 2.78% | $0.07 | $0.24 | 13.35% |
| Dillard's Inc | 14.34 | 4.22 | 1.25 | 3.85% | $0.26 | $0.69 | -0.71% |
| MINISO Group Holding Ltd | 18.35 | 4.15 | 2.54 | 3.98% | $0.65 | $1.96 | 18.89% |
| Macy's Inc | 6.59 | 0.80 | 0.16 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 58.30 | 4.28 | 1.21 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 12.52 | 0.40 | 0.10 | -0.4% | $0.23 | $1.4 | -4.41% |
| Hour Loop Inc | 57.33 | 8.45 | 0.44 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 34.29 | 5.52 | 1.9 | 4.57% | $3.62 | $15.89 | 8.5% |
After examining Amazon.com, the following trends can be inferred:
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The current Price to Earnings ratio of 34.76 is 1.01x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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The elevated Price to Book ratio of 7.29 relative to the industry average by 1.32x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 3.67, which is 1.93x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 5.68% that is 1.11% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 10.11x above the industry average, indicating stronger profitability and robust cash flow generation.
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With higher gross profit of $86.89 Billion, which indicates 5.47x 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 13.33% exceeds the industry average of 8.5%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its 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 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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Amazon.com has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.4.
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This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.
Key Takeaways
For Amazon.com, the PE, PB, and PS ratios are all high compared to its peers in the Broadline Retail industry, indicating that the stock may be overvalued based on these metrics. On the other hand, Amazon.com's high ROE, EBITDA, gross profit, and revenue growth suggest strong operational performance and growth potential relative to industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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