Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in comparison to its major competitors within the Broadline Retail industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of 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 | 35.21 | 7.21 | 3.90 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 18.96 | 2.75 | 2.81 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.41 | 3.74 | 3.44 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 56.28 | 18.80 | 4.46 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 80.68 | 9.58 | 5.03 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 160.65 | 12.50 | 1.85 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 8.87 | 1.41 | 0.27 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 18.11 | 7.82 | 3.61 | 13.35% | $0.74 | $2.0 | 9.47% |
| Dillard’s Inc | 16.43 | 4.84 | 1.43 | 3.86% | $0.14 | $0.58 | 1.41% |
| Vipshop Holdings Ltd | 9.59 | 1.59 | 0.63 | 3.74% | $1.91 | $6.05 | -3.98% |
| Ollie’s Bargain Outlet Holdings Inc | 35.93 | 4.26 | 3.14 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 19.87 | 4.21 | 2.50 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy’s Inc | 11.02 | 1.17 | 0.24 | 1.95% | $0.36 | $2.1 | -1.9% |
| Kohl’s Corp | 8.66 | 0.46 | 0.11 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 62.67 | 9.23 | 0.48 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 37.3 | 5.88 | 2.14 | 5.79% | $6.63 | $17.78 | 11.61% |
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By conducting an in-depth analysis of Amazon.com, we can identify the following trends:
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With a Price to Earnings ratio of 35.21, which is 0.94x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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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 7.21 which exceeds the industry average by 1.23x.
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The stock’s relatively high Price to Sales ratio of 3.9, surpassing the industry average by 1.82x, 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 6.02%, which is 0.23% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion, which is 6.86x above the industry average, indicating stronger profitability and robust cash flow generation.
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The gross profit of $91.5 Billion is 5.15x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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With a revenue growth of 13.4%, which surpasses the industry average of 11.61%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its 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.
By analyzing Amazon.com in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
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Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.37.
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This indicates that the company relies less on debt financing and maintains a more favorable 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 PB and PS ratios are high, suggesting a premium valuation based on book value and sales. In terms of profitability metrics, Amazon.com shows high ROE, EBITDA, and gross profit margins, reflecting strong operational efficiency and financial performance. Additionally, the high revenue growth rate further highlights Amazon.com’s robust position within the industry.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
