Comparing Amazon.com With Industry Competitors In Broadline Retail Industry
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 | 35.69 | 7.48 | 3.77 | 5.79% | $36.48 | $78.69 | 8.62% |
| Alibaba Group Holding Ltd | 16.15 | 2.04 | 2.10 | 1.23% | $21.8 | $90.83 | 6.57% |
| PDD Holdings Inc | 12.15 | 3.51 | 2.99 | 4.59% | $16.09 | $54.73 | 10.21% |
| MercadoLibre Inc | 58.40 | 24.05 | 5.38 | 10.56% | $0.92 | $2.77 | 36.97% |
| Coupang Inc | 210.21 | 12.22 | 1.74 | 2.53% | $0.36 | $2.32 | 11.16% |
| JD.com Inc | 7.66 | 1.39 | 0.29 | 4.6% | $14.27 | $47.85 | 15.78% |
| eBay Inc | 20.39 | 8.83 | 4.22 | 7.59% | $0.77 | $1.86 | 5.61% |
| Ollie's Bargain Outlet Holdings Inc | 42.04 | 4.85 | 3.61 | 2.78% | $0.07 | $0.24 | 13.35% |
| Vipshop Holdings Ltd | 7.79 | 1.39 | 0.54 | 4.85% | $2.45 | $6.08 | -4.98% |
| Dillard's Inc | 12.93 | 3.92 | 1.14 | 8.97% | $0.26 | $0.69 | -1.64% |
| MINISO Group Holding Ltd | 17.41 | 3.94 | 2.41 | 3.98% | $0.65 | $1.96 | 18.89% |
| Macy's Inc | 6.38 | 0.77 | 0.16 | 0.84% | $0.31 | $2.0 | -4.14% |
| Savers Value Village Inc | 74.36 | 3.90 | 1.11 | -1.13% | $0.03 | $0.2 | 4.51% |
| Kohl's Corp | 9.94 | 0.32 | 0.08 | -0.4% | $0.23 | $1.4 | -4.41% |
| Hour Loop Inc | 179.92 | 10.88 | 0.45 | 11.93% | $0.0 | $0.01 | 4.68% |
| Average | 48.27 | 5.86 | 1.87 | 4.49% | $4.16 | $15.21 | 8.04% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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A Price to Earnings ratio of 35.69 significantly below the industry average by 0.74x suggests undervaluation. This can make the stock appealing for those seeking growth.
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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 7.48 which exceeds the industry average by 1.28x.
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The Price to Sales ratio of 3.77, which is 2.02x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The Return on Equity (ROE) of 5.79% is 1.3% above the industry average, highlighting efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion, which is 8.77x above the industry average, indicating stronger profitability and robust cash flow generation.
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The gross profit of $78.69 Billion is 5.17x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 8.62% is notably higher compared to the industry average of 8.04%, 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 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.
When assessing Amazon.com against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
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This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.44, which can be perceived as a positive aspect 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.
Posted-In: BZI-IANews Markets Trading Ideas
