In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Amazon.com (NASDAQ:AMZN) alongside its primary competitors in the Broadline Retail industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amazon.com Inc | 33.22 | 6.96 | 3.51 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 19.15 | 2.70 | 2.83 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.01 | 3.63 | 3.35 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 51.75 | 18.59 | 4.41 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 80.79 | 9.59 | 5.04 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 155.65 | 12.11 | 1.79 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.05 | 1.44 | 0.28 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 21.19 | 9.18 | 4.38 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 9.86 | 1.64 | 0.65 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 16.72 | 4.93 | 1.46 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 34.96 | 4.14 | 3.05 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 20.55 | 4.36 | 2.59 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 10.55 | 1.12 | 0.23 | 1.95% | $0.36 | $2.1 | -1.9% |
| Savers Value Village Inc | 64.85 | 4.76 | 1.35 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.96 | 0.48 | 0.12 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 73 | 10.75 | 0.56 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 39.4 | 5.96 | 2.14 | 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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The stock's Price to Earnings ratio of 33.22 is lower than the industry average by 0.84x, suggesting potential value in the eyes of market participants.
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The elevated Price to Book ratio of 6.96 relative to the industry average by 1.17x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.51, which is 1.64x 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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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 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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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 assesses the extent to which a company relies on borrowed funds compared to its equity.
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 light of the Debt-to-Equity ratio, a comparison between Amazon.com and its top 4 peers reveals the following information:
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Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.
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With a lower debt-to-equity ratio of 0.4, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively 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. 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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