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Exploring The Competitive Space: Amazon.com Versus Industry Peers In Broadline Retail

Benzinga · 2d ago

In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By analyzing important 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 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 32.60 6.68 3.61 6.02% $45.5 $91.5 13.4%
Alibaba Group Holding Ltd 19.60 2.37 2.43 2.05% $27.26 $97.01 4.77%
PDD Holdings Inc 11.51 2.88 2.81 7.79% $25.03 $61.44 8.98%
MercadoLibre Inc 49.16 16.42 3.90 7.06% $0.88 $3.21 39.48%
Sea Ltd 55.71 7.41 3.83 3.77% $0.48 $2.6 38.3%
Coupang Inc 112.33 9.09 1.31 2.02% $0.32 $2.72 17.81%
JD.com Inc 9.45 1.23 0.23 2.3% $7.36 $50.47 14.85%
eBay Inc 19.31 8.34 3.85 13.35% $0.74 $2.0 9.47%
Dillard's Inc 16.48 4.63 1.44 6.55% $0.21 $0.66 2.74%
Vipshop Holdings Ltd 9.29 1.51 0.61 3.06% $1.55 $4.91 3.36%
Ollie's Bargain Outlet Holdings Inc 30.36 3.67 2.67 2.55% $0.08 $0.25 18.59%
Global E Online Ltd 982.75 7.15 7.70 1.43% $0.02 $0.1 25.46%
Macy's Inc 12.97 1.35 0.27 0.25% $0.27 $2.06 0.2%
MINISO Group Holding Ltd 18.85 3.71 2.04 4.08% $0.79 $2.59 28.17%
Kohl's Corp 11.80 0.58 0.15 0.2% $0.25 $1.52 -3.64%
Hour Loop Inc 60 8.26 0.45 7.15% $0.0 $0.02 7.56%
Average 94.64 5.24 2.25 4.24% $4.35 $15.44 14.41%

When closely examining Amazon.com, the following trends emerge:

  • A Price to Earnings ratio of 32.6 significantly below the industry average by 0.34x suggests undervaluation. This can make the stock appealing for those seeking growth.

  • With a Price to Book ratio of 6.68, which is 1.27x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

  • The stock's relatively high Price to Sales ratio of 3.61, surpassing the industry average by 1.6x, may indicate an aspect of overvaluation in terms of sales performance.

  • The Return on Equity (ROE) of 6.02% is 1.78% above the industry average, highlighting efficient use of equity to generate profits.

  • Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion, which is 10.46x above the industry average, indicating stronger profitability and robust cash flow generation.

  • The gross profit of $91.5 Billion is 5.93x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

  • The company is witnessing a substantial decline in revenue growth, with a rate of 13.4% compared to the industry average of 14.41%, which indicates a challenging sales environment.

Debt To Equity Ratio

debt to equity

The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.

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 considering the Debt-to-Equity ratio, Amazon.com can be compared to its top 4 peers, leading to the following observations:

  • Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.

  • With a lower debt-to-equity ratio of 0.37, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by 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 overvaluation relative to industry competitors. In terms of ROE, EBITDA, and gross profit, Amazon.com demonstrates strong performance compared to peers. However, revenue growth is relatively low, potentially impacting future valuation compared to industry counterparts.

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