In today’s rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) vis-à-vis its key competitors in the Broadline Retail industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight 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 | 33.56 | 6.87 | 3.71 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 18.43 | 2.68 | 2.73 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.47 | 3.75 | 3.46 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 49.57 | 16.56 | 3.93 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 61.15 | 8.13 | 4.20 | 3.77% | $0.48 | $2.6 | 38.3% |
| Coupang Inc | 135.86 | 10.99 | 1.59 | 2.02% | $0.32 | $2.72 | 17.81% |
| JD.com Inc | 10.28 | 1.34 | 0.25 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 18.72 | 8.09 | 3.74 | 13.35% | $0.74 | $2.0 | 9.47% |
| Dillard’s Inc | 18.33 | 5.40 | 1.60 | 3.86% | $0.14 | $0.58 | 1.41% |
| Vipshop Holdings Ltd | 10.53 | 1.75 | 0.69 | 3.74% | $1.91 | $6.05 | -3.98% |
| Ollie’s Bargain Outlet Holdings Inc | 36.59 | 4.33 | 3.20 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 20.02 | 4.24 | 2.52 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy’s Inc | 11.40 | 1.21 | 0.25 | 1.95% | $0.36 | $2.1 | -1.9% |
| Kohl’s Corp | 9.41 | 0.50 | 0.12 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 69.67 | 10.26 | 0.53 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 34.6 | 5.66 | 2.06 | 5.84% | $6.62 | $17.8 | 11.72% |
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When analyzing Amazon.com, the following trends become evident:
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At 33.56, the stock’s Price to Earnings ratio is 0.97x less than the industry average, suggesting favorable growth potential.
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The elevated Price to Book ratio of 6.87 relative to the industry average by 1.21x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 3.71, which is 1.8x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 6.02% is 0.18% above the industry average, highlighting efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion is 6.87x above the industry average, highlighting stronger profitability and robust cash flow generation.
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With higher gross profit of $91.5 Billion, which indicates 5.14x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 13.4%, outperforming the industry average of 11.72%.
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.
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 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.