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 | 34.99 | 7.46 | 3.55 | 5.79% | $36.48 | $78.69 | 8.62% |
| Alibaba Group Holding Ltd | 15.41 | 1.95 | 2 | 1.23% | $59.0 | $117.63 | -15.6% |
| PDD Holdings Inc | 10.99 | 3.17 | 2.71 | 4.59% | $16.09 | $54.73 | 10.21% |
| MercadoLibre Inc | 58.78 | 24.21 | 5.41 | 10.56% | $0.92 | $2.77 | 36.97% |
| Coupang Inc | 201.79 | 11.73 | 1.67 | 2.53% | $0.36 | $2.32 | 11.16% |
| JD.com Inc | 8.08 | 1.47 | 0.30 | 4.6% | $14.27 | $47.85 | 15.78% |
| eBay Inc | 18.61 | 7.21 | 3.68 | 9.95% | $0.77 | $1.86 | 1.13% |
| Vipshop Holdings Ltd | 7.67 | 1.37 | 0.53 | 4.85% | $2.45 | $6.08 | -4.98% |
| Ollie’s Bargain Outlet Holdings Inc | 35.73 | 4.12 | 3.07 | 2.78% | $0.07 | $0.24 | 13.35% |
| Dillard’s Inc | 11.38 | 3.46 | 1 | 8.97% | $0.26 | $0.69 | -1.64% |
| MINISO Group Holding Ltd | 16.30 | 3.70 | 2.26 | 3.98% | $0.65 | $1.96 | 18.89% |
| Macy’s Inc | 5.72 | 0.69 | 0.14 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 71.21 | 3.74 | 1.07 | -1.13% | $0.03 | $0.2 | 4.51% |
| Kohl’s Corp | 7.77 | 0.25 | 0.06 | -0.4% | $0.23 | $1.4 | -4.41% |
| Hour Loop Inc | 121.42 | 7.34 | 0.31 | 11.93% | $0.0 | $0.01 | 4.68% |
| Average | 42.2 | 5.31 | 1.73 | 4.66% | $6.82 | $17.12 | 6.14% |
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Upon analyzing Amazon.com, the following trends can be observed:
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A Price to Earnings ratio of 34.99 significantly below the industry average by 0.83x suggests undervaluation. This can make the stock appealing for those seeking growth.
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The elevated Price to Book ratio of 7.46 relative to the industry average by 1.4x suggests company might be overvalued based on its book value.
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The stock’s relatively high Price to Sales ratio of 3.55, surpassing the industry average by 2.05x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 5.79% is 1.13% above the industry average, highlighting efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion, which is 5.35x above the industry average, indicating stronger profitability and robust cash flow generation.
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The company has higher gross profit of $78.69 Billion, which indicates 4.6x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company’s revenue growth of 8.62% is notably higher compared to the industry average of 6.14%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company’s financial health and its reliance on debt financing.
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 terms of the Debt-to-Equity ratio, Amazon.com stands in comparison with its top 4 peers, leading to the following comparisons:
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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 0.44, 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 PB and PS ratios are high, suggesting a premium valuation based on book value and sales. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms its industry peers, reflecting strong profitability and growth potential.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
