Exploring The Competitive Space: Amazon.com Versus Industry Peers In Broadline Retail
In the fast-paced 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) in comparison to its major competitors within the Broadline Retail industry. By analyzing crucial 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 | 34.35 | 7.20 | 3.62 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 16.02 | 2.32 | 2.37 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 13.12 | 3.40 | 3.14 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 58.77 | 21.12 | 5.01 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 92.15 | 10.94 | 5.75 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 142.05 | 11.06 | 1.63 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 8.82 | 1.41 | 0.27 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 19.98 | 8.65 | 4.13 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 8.98 | 1.49 | 0.59 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 15.27 | 4.50 | 1.33 | 3.85% | $0.26 | $0.69 | -0.71% |
| Ollie's Bargain Outlet Holdings Inc | 36.62 | 4.34 | 3.20 | 3.49% | $0.07 | $0.24 | 17.82% |
| MINISO Group Holding Ltd | 23.38 | 4.98 | 2.94 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 6.81 | 0.82 | 0.17 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 62.70 | 4.61 | 1.30 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.67 | 0.46 | 0.11 | 3.97% | $0.23 | $1.4 | 9.68% |
| Hour Loop Inc | 43 | 6.33 | 0.33 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 37.09 | 5.76 | 2.15 | 5.42% | $6.18 | $16.59 | 11.47% |
When closely examining Amazon.com, the following trends emerge:
At 34.35, the stock's Price to Earnings ratio is 0.93x less than the industry average, suggesting favorable growth potential.
The elevated Price to Book ratio of 7.2 relative to the industry average by 1.25x suggests company might be overvalued based on its book value.
With a relatively high Price to Sales ratio of 3.62, which is 1.68x the industry average, the stock might be considered overvalued based on sales performance.
The Return on Equity (ROE) of 5.68% is 0.26% above the industry average, highlighting efficient use of equity to generate profits.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion is 5.92x above the industry average, highlighting 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 gauges the extent to which a company has financed its operations through debt relative to 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.
When evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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
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 the company'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.