In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight 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 74% of total, followed by Amazon Web Services (17%), and advertising services (9%). International segments constitute 22% of Amazon's total revenue, 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 | 32.53 | 6.66 | 3.60 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 21.19 | 2.56 | 2.62 | 2.05% | $27.26 | $97.01 | 4.77% |
| PDD Holdings Inc | 11.48 | 2.87 | 2.80 | 7.79% | $25.03 | $61.44 | 8.98% |
| MercadoLibre Inc | 49.30 | 16.47 | 3.91 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 55.28 | 7.35 | 3.80 | 3.77% | $0.48 | $2.6 | 38.3% |
| Coupang Inc | 123.14 | 9.96 | 1.44 | 2.02% | $0.32 | $2.72 | 17.81% |
| JD.com Inc | 9.82 | 1.28 | 0.24 | 2.3% | $7.36 | $50.47 | 14.85% |
| eBay Inc | 18.71 | 8.08 | 3.73 | 13.35% | $0.74 | $2.0 | 9.47% |
| Dillard's Inc | 19.79 | 5.56 | 1.73 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 10.66 | 1.73 | 0.70 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie's Bargain Outlet Holdings Inc | 32.18 | 3.89 | 2.83 | 2.55% | $0.08 | $0.25 | 18.59% |
| Global E Online Ltd | 1002.75 | 7.30 | 7.85 | 1.43% | $0.02 | $0.1 | 25.46% |
| Macy's Inc | 14.12 | 1.47 | 0.29 | 0.25% | $0.27 | $2.06 | 0.2% |
| MINISO Group Holding Ltd | 19.86 | 3.91 | 2.15 | 4.08% | $0.79 | $2.59 | 28.17% |
| Kohl's Corp | 13.82 | 0.68 | 0.17 | 0.2% | $0.25 | $1.52 | -3.64% |
| Hour Loop Inc | 68.67 | 9.45 | 0.51 | 7.15% | $0.0 | $0.02 | 7.56% |
| Average | 98.05 | 5.5 | 2.32 | 4.24% | $4.35 | $15.44 | 14.41% |
Through a thorough examination of Amazon.com, we can discern the following trends:
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A Price to Earnings ratio of 32.53 significantly below the industry average by 0.33x suggests undervaluation. This can make the stock appealing for those seeking growth.
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With a Price to Book ratio of 6.66, which is 1.21x 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 3.6, which is 1.55x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The Return on Equity (ROE) of 6.02% is 1.78% above the industry average, highlighting efficient use of equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion, which is 10.46x above the industry average, indicating stronger profitability and robust cash flow generation.
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The company has higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 13.4% is significantly below the industry average of 14.41%. This suggests a potential struggle in generating increased sales volume.
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 evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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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 0.37.
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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, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers in the Broadline Retail industry. However, the high ROE, EBITDA, gross profit, and low revenue growth suggest that Amazon.com is efficiently utilizing its resources and generating strong profits, despite slower revenue growth compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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