In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Amazon.com (NASDAQ:AMZN) alongside its primary competitors in the Broadline Retail industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amazon.com Inc | 34.93 | 7.32 | 3.69 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 16.31 | 2.06 | 2.12 | 1.23% | $21.8 | $90.83 | 6.57% |
| PDD Holdings Inc | 13.22 | 3.43 | 3.16 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 59.61 | 21.42 | 5.08 | 9.76% | $0.95 | $3.09 | 33.85% |
| Coupang Inc | 141.20 | 10.99 | 1.62 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 8.63 | 1.38 | 0.26 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 20.82 | 9.01 | 4.30 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 9.05 | 1.50 | 0.59 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 15.14 | 4.46 | 1.32 | 3.85% | $0.26 | $0.69 | -0.71% |
| Ollie's Bargain Outlet Holdings Inc | 40.18 | 4.63 | 3.45 | 2.78% | $0.07 | $0.24 | 13.35% |
| MINISO Group Holding Ltd | 23.53 | 5.01 | 2.96 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 6.87 | 0.83 | 0.17 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 58.10 | 4.27 | 1.21 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 14.83 | 0.48 | 0.11 | -0.4% | $0.23 | $1.4 | -4.41% |
| Hour Loop Inc | 49.43 | 7.28 | 0.38 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 34.07 | 5.48 | 1.91 | 4.92% | $4.32 | $16.14 | 8.58% |
When analyzing Amazon.com, the following trends become evident:
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The current Price to Earnings ratio of 34.93 is 1.03x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 7.32 which exceeds the industry average by 1.34x.
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The stock's relatively high Price to Sales ratio of 3.69, surpassing the industry average by 1.93x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a higher Return on Equity (ROE) of 5.68%, which is 0.76% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 8.47x above the industry average, implying stronger profitability and robust cash flow generation.
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With higher gross profit of $86.89 Billion, which indicates 5.38x 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 8.58%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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 analyzing Amazon.com in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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Amazon.com exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated 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 seen as a positive aspect for 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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