In today’s rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By analyzing important financial metrics, market position, and growth prospects, we aim 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 | 34.78 | 7.29 | 3.67 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 17.90 | 2.60 | 2.65 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 13.51 | 3.50 | 3.23 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 57.78 | 20.76 | 4.92 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 101.06 | 11.99 | 6.30 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 162.05 | 12.61 | 1.86 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.39 | 1.50 | 0.29 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 20.18 | 8.74 | 4.17 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 9.73 | 1.62 | 0.64 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard’s Inc | 15.87 | 4.68 | 1.38 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie’s Bargain Outlet Holdings Inc | 38.12 | 4.52 | 3.33 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 23.30 | 4.96 | 2.93 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy’s Inc | 9.63 | 1.02 | 0.21 | 1.95% | $0.31 | $2.0 | 4.3% |
| Savers Value Village Inc | 62.20 | 4.57 | 1.29 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl’s Corp | 8.23 | 0.44 | 0.11 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 119.67 | 17.63 | 0.91 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 44.57 | 6.74 | 2.28 | 5.5% | $6.19 | $16.59 | 11.18% |
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After thoroughly examining Amazon.com, the following trends can be inferred:
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The Price to Earnings ratio of 34.78 is 0.78x lower than the industry average, indicating potential undervaluation for the stock.
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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 7.29 which exceeds the industry average by 1.08x.
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The stock’s relatively high Price to Sales ratio of 3.67, surpassing the industry average by 1.61x, may indicate an aspect of overvaluation in terms of 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 company has higher gross profit of $86.89 Billion, which indicates 5.24x 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 11.18%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
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 assessing Amazon.com against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Amazon.com is in a relatively 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 implies that the company relies less on debt financing and has a more favorable balance between debt and equity.
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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