Amidst today's fast-paced and highly competitive business environment, it is crucial for investors and industry enthusiasts to conduct comprehensive company evaluations. 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 | 33 | 6.92 | 3.48 | 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 | 14.18 | 3.68 | 3.39 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 51.92 | 18.65 | 4.42 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 85.41 | 10.14 | 5.33 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 158.45 | 12.33 | 1.82 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.42 | 1.50 | 0.29 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 21.26 | 9.20 | 4.39 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 10.17 | 1.69 | 0.67 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 16.39 | 4.83 | 1.43 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 35.02 | 4.15 | 3.06 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 21.21 | 4.50 | 2.67 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 10.22 | 1.08 | 0.22 | 1.95% | $0.36 | $2.1 | -1.9% |
| Savers Value Village Inc | 63.15 | 4.64 | 1.31 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.69 | 0.46 | 0.11 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 72 | 10.61 | 0.55 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 39.84 | 6.02 | 2.18 | 5.5% | $6.19 | $16.6 | 10.76% |
After examining Amazon.com, the following trends can be inferred:
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At 33.0, the stock's Price to Earnings ratio is 0.83x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 6.92, which is 1.15x 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.
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The Price to Sales ratio of 3.48, which is 1.6x 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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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 5.91x above the industry average, indicating 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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With a revenue growth of 13.33%, which surpasses the industry average of 10.76%, the company is demonstrating robust sales expansion and gaining market share.
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.
When evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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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
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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