In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) and its primary competitors in the Broadline Retail industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for 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 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 | 31.95 | 6.54 | 3.53 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 21.02 | 2.54 | 2.60 | 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 | 49.20 | 16.44 | 3.90 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 54.59 | 7.26 | 3.75 | 3.77% | $0.48 | $2.6 | 38.3% |
| Coupang Inc | 122.05 | 9.87 | 1.43 | 2.02% | $0.32 | $2.72 | 17.81% |
| JD.com Inc | 9.78 | 1.27 | 0.24 | 2.3% | $7.36 | $50.47 | 14.85% |
| eBay Inc | 18.93 | 8.18 | 3.78 | 13.35% | $0.74 | $2.0 | 9.47% |
| Dillard's Inc | 18.53 | 5.21 | 1.62 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 10.64 | 1.73 | 0.70 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie's Bargain Outlet Holdings Inc | 31.55 | 3.81 | 2.78 | 2.55% | $0.08 | $0.25 | 18.59% |
| Global E Online Ltd | 1003.75 | 7.30 | 7.86 | 1.43% | $0.02 | $0.1 | 25.46% |
| Macy's Inc | 14.21 | 1.48 | 0.30 | 0.25% | $0.27 | $2.06 | 0.2% |
| MINISO Group Holding Ltd | 19.84 | 3.90 | 2.14 | 4.08% | $0.79 | $2.59 | 28.17% |
| Kohl's Corp | 13.45 | 0.66 | 0.17 | 0.2% | $0.25 | $1.52 | -3.64% |
| Hour Loop Inc | 66.33 | 9.13 | 0.50 | 7.15% | $0.0 | $0.02 | 7.56% |
| Average | 97.69 | 5.44 | 2.3 | 4.24% | $4.35 | $15.44 | 14.41% |
When closely examining Amazon.com, the following trends emerge:
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A Price to Earnings ratio of 31.95 significantly below the industry average by 0.33x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The elevated Price to Book ratio of 6.54 relative to the industry average by 1.2x suggests company might be overvalued based on its book value.
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The stock's relatively high Price to Sales ratio of 3.53, surpassing the industry average by 1.53x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 6.02% that is 1.78% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion, which is 10.46x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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With higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company is witnessing a substantial decline in revenue growth, with a rate of 13.4% compared to the industry average of 14.41%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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 examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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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 in the Broadline Retail industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting overvaluation relative to industry standards. In terms of ROE, EBITDA, and gross profit, Amazon.com demonstrates strong performance compared to industry peers. However, the revenue growth rate is lower than that of its competitors, which may warrant further investigation.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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