In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) and its primary competitors in the Broadline Retail industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 | 35.25 | 7.39 | 3.72 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 18.74 | 2.74 | 2.77 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.31 | 3.71 | 3.42 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 61.16 | 21.98 | 5.21 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 98.23 | 11.66 | 6.12 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 167.10 | 13 | 1.92 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.86 | 1.57 | 0.30 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 19.91 | 8.62 | 4.12 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 10.03 | 1.67 | 0.66 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 16.62 | 4.90 | 1.45 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 40.10 | 4.75 | 3.50 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 23.31 | 4.96 | 2.94 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 10.01 | 1.06 | 0.22 | 1.95% | $0.36 | $2.1 | -1.9% |
| Savers Value Village Inc | 64.50 | 4.74 | 1.34 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 9.34 | 0.50 | 0.12 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 109.33 | 16.11 | 0.83 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 44.84 | 6.8 | 2.33 | 5.5% | $6.19 | $16.6 | 10.76% |
Upon a comprehensive analysis of Amazon.com, the following trends can be discerned:
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With a Price to Earnings ratio of 35.25, which is 0.79x 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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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 7.39 which exceeds the industry average by 1.09x.
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With a relatively high Price to Sales ratio of 3.72, which is 1.6x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 5.68% is 0.18% above the industry average, highlighting efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 5.91x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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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% is notably higher compared to the industry average of 10.76%, showcasing exceptional sales performance and strong demand for its products or services.
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.
When examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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Amazon.com is in a relatively 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 implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
Key Takeaways
The low P/E ratio suggests Amazon.com may be undervalued compared to its peers in the Broadline Retail industry. However, the high P/B and P/S ratios indicate that the market values Amazon.com's assets and sales more highly. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth reflect strong financial performance relative to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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