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 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 | 33.77 | 6.92 | 3.74 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 22.02 | 2.66 | 2.73 | 2.05% | $27.26 | $97.01 | 4.77% |
| PDD Holdings Inc | 10.79 | 2.70 | 2.64 | 7.79% | $25.03 | $61.44 | 8.98% |
| MercadoLibre Inc | 50.65 | 16.92 | 4.02 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 53.02 | 7.05 | 3.64 | 3.77% | $0.48 | $2.6 | 38.3% |
| eBay Inc | 20.63 | 8.91 | 4.12 | 13.35% | $0.74 | $2.0 | 9.47% |
| JD.com Inc | 9.47 | 1.23 | 0.23 | 2.3% | $7.36 | $50.47 | 14.85% |
| Coupang Inc | 100.62 | 8.14 | 1.17 | 2.02% | $0.32 | $2.72 | 17.81% |
| Dillard’s Inc | 18.07 | 5.08 | 1.58 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 8.74 | 1.42 | 0.57 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie’s Bargain Outlet Holdings Inc | 32.30 | 3.90 | 2.84 | 2.55% | $0.08 | $0.25 | 18.59% |
| Global E Online Ltd | 937.50 | 6.82 | 7.34 | 1.43% | $0.02 | $0.1 | 25.46% |
| MINISO Group Holding Ltd | 19.31 | 3.79 | 2.09 | 4.08% | $0.79 | $2.59 | 28.17% |
| Macy’s Inc | 12.79 | 1.34 | 0.27 | 0.25% | $0.27 | $2.06 | 0.2% |
| Kohl’s Corp | 10.76 | 0.53 | 0.13 | 0.2% | $0.25 | $1.52 | -3.64% |
| Hour Loop Inc | 61.67 | 8.48 | 0.46 | 7.15% | $0.0 | $0.02 | 7.56% |
| Average | 91.22 | 5.26 | 2.26 | 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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The stock’s Price to Earnings ratio of 33.77 is lower than the industry average by 0.37x, suggesting potential value in the eyes of market participants.
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The elevated Price to Book ratio of 6.92 relative to the industry average by 1.32x suggests company might be overvalued based on its book value.
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The Price to Sales ratio of 3.74, which is 1.65x 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 company has a higher Return on Equity (ROE) of 6.02%, which is 1.78% 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 $45.5 Billion, which is 10.46x above the industry average, implying stronger profitability and robust cash flow generation.
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The gross profit of $91.5 Billion is 5.93x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company’s revenue growth of 13.4% is significantly lower compared to the industry average of 14.41%. This indicates a potential fall in the company’s sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 0.37, 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, and gross profit reflect strong profitability and operational efficiency. However, the low revenue growth rate may indicate a slower expansion compared to industry peers.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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