In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 | 33.85 | 7.09 | 3.57 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 19.26 | 2.72 | 2.85 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.09 | 3.66 | 3.37 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 52.90 | 19.01 | 4.51 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 84.85 | 10.07 | 5.29 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 157.15 | 12.23 | 1.81 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.16 | 1.46 | 0.28 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 21.11 | 9.14 | 4.36 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 9.96 | 1.66 | 0.65 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 16.42 | 4.84 | 1.43 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 35.18 | 4.17 | 3.07 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 20.62 | 4.37 | 2.60 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 10.36 | 1.10 | 0.23 | 1.95% | $0.36 | $2.1 | -1.9% |
| Savers Value Village Inc | 63.85 | 4.69 | 1.32 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.82 | 0.47 | 0.12 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 75 | 11.05 | 0.57 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 39.92 | 6.04 | 2.16 | 5.5% | $6.19 | $16.6 | 10.76% |
When analyzing Amazon.com, the following trends become evident:
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At 33.85, the stock's Price to Earnings ratio is 0.85x less than the industry average, suggesting favorable growth potential.
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With a Price to Book ratio of 7.09, which is 1.17x 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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With a relatively high Price to Sales ratio of 3.57, which is 1.65x the industry average, the stock might be considered overvalued based on sales performance.
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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.
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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.
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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 is a key indicator of a company's financial health and its reliance on debt financing.
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:
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Amazon.com has a 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 suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator 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. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms 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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