Investigating Amazon.com's Standing In Broadline Retail Industry Compared To Competitors

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.

By conducting an in-depth analysis of Amazon.com, we can identify the following trends:

• At 32.99, the stock's Price to Earnings ratio is 0.79x less than the industry average, suggesting favorable growth potential.

• With a Price to Book ratio of 6.91, which is 1.11x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

• The Price to Sales ratio of 3.48, which is 1.57x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The company has a higher Return on Equity (ROE) of 5.68%, which is 0.18% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 5.91x above the industry average, implying stronger profitability and robust cash flow generation.

• With higher gross profit of $86.89 Billion, which indicates 5.23x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• 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 indicates the proportion of debt and equity used by a company to finance its assets and operations.

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 considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:

• 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.

• 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 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.