Investigating Amazon.com's Standing In Broadline Retail Industry Compared To Competitors
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 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 | 34.91 | 7.32 | 3.68 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 18.02 | 2.28 | 2.34 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 13.01 | 3.37 | 3.11 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 61.07 | 21.94 | 5.20 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 96.15 | 11.41 | 6 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 142.90 | 11.12 | 1.64 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 8.70 | 1.39 | 0.27 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 20.14 | 8.72 | 4.16 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 8.99 | 1.49 | 0.59 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 14.71 | 4.33 | 1.28 | 3.85% | $0.26 | $0.69 | -0.71% |
| Ollie's Bargain Outlet Holdings Inc | 36.77 | 4.36 | 3.21 | 3.49% | $0.07 | $0.24 | 17.82% |
| MINISO Group Holding Ltd | 23.52 | 5.01 | 2.96 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 6.68 | 0.81 | 0.16 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 60.45 | 4.44 | 1.25 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.10 | 0.43 | 0.11 | 3.97% | $0.23 | $1.4 | 9.68% |
| Hour Loop Inc | 46.33 | 6.83 | 0.35 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 37.7 | 5.86 | 2.18 | 5.42% | $6.18 | $16.59 | 11.47% |
After a detailed analysis of Amazon.com, the following trends become apparent:
A Price to Earnings ratio of 34.91 significantly below the industry average by 0.93x suggests undervaluation. This can make the stock appealing for those seeking growth.
The elevated Price to Book ratio of 7.32 relative to the industry average by 1.25x suggests company might be overvalued based on its book value.
The stock's relatively high Price to Sales ratio of 3.68, surpassing the industry average by 1.69x, may indicate an aspect of overvaluation in terms of sales performance.
The company has a higher Return on Equity (ROE) of 5.68%, which is 0.26% 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 $36.6 Billion, which is 5.92x above the industry average, indicating stronger profitability and robust cash flow generation.
With higher gross profit of $86.89 Billion, which indicates 5.24x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
The company's revenue growth of 13.33% is notably higher compared to the industry average of 11.47%, 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 financial metric that helps determine the level of financial risk associated with a company's capital structure.
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:
Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.4.
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
The low P/E ratio suggests Amazon.com may be undervalued compared to its peers in the Broadline Retail industry. However, the high P/B and P/S ratios indicate that the market values the company's assets and sales more highly. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth reflect strong financial performance relative to industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.