In today’s fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By examining key 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 | 35.05 | 7.35 | 3.70 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 17.95 | 2.60 | 2.66 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 13.54 | 3.51 | 3.24 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 57.75 | 20.75 | 4.92 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 101.29 | 12.02 | 6.32 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 162.25 | 12.63 | 1.86 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.59 | 1.53 | 0.29 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 20.55 | 8.90 | 4.25 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 9.71 | 1.61 | 0.64 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard’s Inc | 16.18 | 4.77 | 1.41 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie’s Bargain Outlet Holdings Inc | 38.14 | 4.52 | 3.33 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 23.83 | 5.07 | 3 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy’s Inc | 9.92 | 1.05 | 0.22 | 1.95% | $0.31 | $2.0 | 4.3% |
| Savers Value Village Inc | 63.65 | 4.68 | 1.32 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl’s Corp | 8.68 | 0.46 | 0.11 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 113.33 | 16.70 | 0.86 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 44.42 | 6.72 | 2.3 | 5.5% | $6.19 | $16.59 | 11.18% |
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After a detailed analysis of Amazon.com, the following trends become apparent:
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The stock’s Price to Earnings ratio of 35.05 is lower than the industry average by 0.79x, suggesting potential value in the eyes of 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 7.35 which exceeds the industry average by 1.09x.
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The stock’s relatively high Price to Sales ratio of 3.7, surpassing the industry average by 1.61x, may indicate an aspect of overvaluation in terms of sales performance.
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The Return on Equity (ROE) of 5.68% is 0.18% above the industry average, highlighting efficient use of equity to generate profits.
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With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 5.91x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
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Compared to its industry, 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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The company is experiencing remarkable revenue growth, with a rate of 13.33%, outperforming the industry average of 11.18%.
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 can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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Amazon.com has a 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 suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator 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, gross profit, and revenue growth outperform 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.