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 (NASDAQ: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 | 35.42 | 7.42 | 3.74 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 15.70 | 2.28 | 2.32 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 13.47 | 3.49 | 3.22 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 59.71 | 21.45 | 5.09 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 98.77 | 11.72 | 6.16 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 144.55 | 11.25 | 1.66 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 8.80 | 1.40 | 0.27 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 20.59 | 8.92 | 4.26 | 7.59% | $0.65 | $1.95 | 6.14% |
| Dillard's Inc | 15.93 | 4.69 | 1.39 | 3.85% | $0.26 | $0.69 | -0.71% |
| Vipshop Holdings Ltd | 9.19 | 1.53 | 0.60 | 3.74% | $1.91 | $6.05 | -3.98% |
| Ollie's Bargain Outlet Holdings Inc | 38.67 | 4.58 | 3.38 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 23.17 | 4.93 | 2.92 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 9.85 | 1.04 | 0.21 | 1.95% | $0.31 | $2.0 | 4.3% |
| Savers Value Village Inc | 62.85 | 4.62 | 1.30 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.91 | 0.47 | 0.12 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 121.67 | 17.92 | 0.93 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 43.46 | 6.69 | 2.26 | 5.5% | $6.2 | $16.6 | 11.04% |
By carefully studying Amazon.com, we can deduce the following trends:
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With a Price to Earnings ratio of 35.42, which is 0.82x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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The elevated Price to Book ratio of 7.42 relative to the industry average by 1.11x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.74, which is 1.65x 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 0.18% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion is 5.9x above the industry average, highlighting stronger profitability and robust cash flow generation.
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Compared to its industry, the company has higher gross profit of $86.89 Billion, which indicates 5.23x above the industry average, indicating 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 11.04%, indicating strong sales performance and market outperformance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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 evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.4, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
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. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth outperform 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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