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 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 | 47.15 | 8.95 | 3.80 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.17 | 1.51 | 1.56 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 10 | 3.67 | 2.91 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 65.17 | 23.27 | 5.09 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.53 | 1.65 | 0.36 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 39.23 | 9.58 | 1.39 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.39 | 5.75 | 3.24 | 11.59% | $0.95 | $1.85 | 3.04% |
| MINISO Group Holding Ltd | 23.38 | 5.52 | 3.81 | 6.68% | $0.88 | $2.03 | 19.29% |
| Dillard’s Inc | 11.63 | 3.65 | 1.09 | 6.37% | $0.21 | $0.63 | -3.53% |
| Vipshop Holdings Ltd | 6.35 | 1.32 | 0.48 | 2.76% | $1.47 | $4.96 | -9.18% |
| Ollie’s Bargain Outlet Holdings Inc | 31.10 | 3.96 | 2.86 | 2.24% | $0.06 | $0.21 | 7.79% |
| Nordstrom Inc | 15.27 | 4.04 | 0.27 | 4.75% | $0.3 | $1.31 | 4.34% |
| Macy’s Inc | 22.74 | 0.93 | 0.17 | 0.66% | $0.29 | $2.04 | -2.68% |
| Savers Value Village Inc | 24.35 | 4.14 | 1.23 | 5.09% | $0.07 | $0.22 | 0.53% |
| Kohl’s Corp | 5.79 | 0.38 | 0.09 | 0.58% | $0.28 | $1.57 | -8.49% |
| Groupon Inc | 15.86 | 10.88 | 0.81 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.06 | 5.35 | 1.69 | 7.12% | $6.98 | $14.45 | 7.92% |
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By analyzing Amazon.com, we can infer the following trends:
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At 47.15, the stock’s Price to Earnings ratio significantly exceeds the industry average by 2.24x, suggesting a premium valuation relative to industry peers.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 8.95 which exceeds the industry average by 1.67x.
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The stock’s relatively high Price to Sales ratio of 3.8, surpassing the industry average by 2.25x, may indicate an aspect of overvaluation in terms of sales performance.
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The company has a lower Return on Equity (ROE) of 6.19%, which is 0.93% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion is 4.6x above the industry average, highlighting stronger profitability and robust cash flow generation.
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The gross profit of $31.0 Billion is 2.15x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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With a revenue growth of 11.04%, which surpasses the industry average of 7.92%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to 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.
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 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 0.52, 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 PE, PB, and PS ratios, Amazon.com is considered overvalued compared to its peers in the Broadline Retail industry. This is indicated by the high PE, PB, and PS ratios. In terms of ROE, Amazon.com lags behind its industry peers, suggesting lower profitability. However, Amazon.com outperforms its peers in terms of EBITDA, gross profit, and revenue growth, indicating strong operational performance and growth potential within the industry sector.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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