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 | 34.72 | 7.28 | 3.66 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 20.05 | 2.83 | 2.97 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.13 | 3.67 | 3.38 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 56.19 | 20.19 | 4.79 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 96.91 | 11.50 | 6.04 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 162.35 | 12.63 | 1.87 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.47 | 1.51 | 0.29 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 20.03 | 8.67 | 4.14 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 10.71 | 1.78 | 0.70 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 16.48 | 4.86 | 1.44 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 36.66 | 4.34 | 3.20 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 20.76 | 4.40 | 2.61 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 9.82 | 1.04 | 0.21 | 1.95% | $0.36 | $2.1 | -1.9% |
| Savers Value Village Inc | 64.45 | 4.73 | 1.34 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.21 | 0.44 | 0.11 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 89.33 | 13.16 | 0.68 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 42.37 | 6.38 | 2.25 | 5.5% | $6.19 | $16.6 | 10.76% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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The Price to Earnings ratio of 34.72 is 0.82x lower than the industry average, indicating potential undervaluation for the stock.
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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 7.28 which exceeds the industry average by 1.14x.
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The Price to Sales ratio of 3.66, which is 1.63x 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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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 gross profit of $86.89 Billion is 5.23x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 13.33%, outperforming the industry average of 10.76%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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 terms of the Debt-to-Equity ratio, Amazon.com can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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Compared to its top 4 peers, Amazon.com has a stronger financial position indicated by its lower debt-to-equity ratio of 0.4.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
For Amazon.com in the Broadline Retail industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting a premium valuation based on assets and sales. In terms of profitability, Amazon.com shows high ROE, EBITDA, and gross profit margins, outperforming industry peers. Additionally, the company exhibits strong revenue growth, reflecting a positive outlook for future performance.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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