Evaluating Amazon.com Against Peers In Broadline Retail Industry

Benzinga · 04/14 15:01

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 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 33.43 6.86 3.11 7.34% $38.55 $88.9 10.49%
Alibaba Group Holding Ltd 15.89 1.89 1.97 5.01% $59.0 $117.63 7.61%
PDD Holdings Inc 8.75 2.95 2.50 9.28% $29.18 $59.65 11.33%
MercadoLibre Inc 52.98 23.27 4.87 15.3% $0.96 $2.75 37.42%
JD.com Inc 9.97 1.62 0.36 4.21% $15.92 $45.04 33.26%
Coupang Inc 270.62 9.56 1.31 3.76% $0.44 $2.49 21.4%
eBay Inc 16.35 5.83 3.15 12.84% $0.76 $1.86 0.66%
Ollie's Bargain Outlet Holdings Inc 35.42 4.13 3.11 4.14% $0.1 $0.27 2.79%
Vipshop Holdings Ltd 6.43 1.19 0.46 6.31% $1.47 $4.96 60.69%
Dillard's Inc 8.45 2.72 0.76 11.4% $0.31 $0.74 -4.97%
MINISO Group Holding Ltd 13.83 3.46 2.13 8.12% $0.88 $2.03 4.2%
Nordstrom Inc 13.67 3.49 0.27 15.61% $0.44 $1.69 -2.17%
Macy's Inc 5.49 0.70 0.14 7.86% $0.68 $3.02 -4.39%
Savers Value Village Inc 52.71 3.37 0.97 -0.44% $0.04 $0.22 5.02%
Kohl's Corp 6.86 0.20 0.05 1.26% $0.31 $1.92 -9.39%
Hour Loop Inc 61.50 8.38 0.31 -25.78% $-0.0 $0.02 -8.51%
Average 38.59 4.85 1.49 5.26% $7.37 $16.29 10.33%

Through a detailed examination of Amazon.com, we can deduce the following trends:

  • A Price to Earnings ratio of 33.43 significantly below the industry average by 0.87x suggests undervaluation. This can make the stock appealing for those seeking growth.

  • The elevated Price to Book ratio of 6.86 relative to the industry average by 1.41x suggests company might be overvalued based on its book value.

  • With a relatively high Price to Sales ratio of 3.11, which is 2.09x the industry average, the stock might be considered overvalued based on sales performance.

  • The company has a higher Return on Equity (ROE) of 7.34%, which is 2.08% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

  • Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.23x above the industry average, indicating stronger profitability and robust cash flow generation.

  • With higher gross profit of $88.9 Billion, which indicates 5.46x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

  • The company is experiencing remarkable revenue growth, with a rate of 10.49%, outperforming the industry average of 10.33%.

Debt To Equity Ratio

debt to equity

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.

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:

  • Amazon.com exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.46.

  • This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.

Key Takeaways

For Amazon.com in the Broadline Retail industry, the PE ratio is low compared to peers, 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 financial performance and growth potential.

This article was generated by Benzinga's automated content engine and reviewed by an editor.