In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Amazon.com AMZN in relation to its major competitors in the Broadline Retail industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer 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 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 | 31.44 | 6.70 | 3.19 | 5.79% | $36.48 | $78.69 | 8.62% |
| Alibaba Group Holding Ltd | 18.17 | 2.16 | 2.25 | 5.01% | $59.0 | $117.63 | 7.61% |
| PDD Holdings Inc | 10.42 | 3.59 | 2.98 | 9.28% | $32.41 | $62.81 | 24.45% |
| MercadoLibre Inc | 60.27 | 24.82 | 5.55 | 15.3% | $0.96 | $2.75 | 37.42% |
| JD.com Inc | 9.11 | 1.48 | 0.32 | 4.21% | $12.54 | $53.12 | 13.37% |
| Coupang Inc | 185.71 | 10.80 | 1.53 | 2.53% | $0.36 | $2.32 | 11.16% |
| eBay Inc | 16.71 | 6.47 | 3.30 | 9.95% | $0.77 | $1.86 | 1.13% |
| Vipshop Holdings Ltd | 6.96 | 1.29 | 0.50 | 6.31% | $3.29 | $7.63 | -4.18% |
| Ollie’s Bargain Outlet Holdings Inc | 32.87 | 3.85 | 2.89 | 4.14% | $0.1 | $0.27 | 2.79% |
| MINISO Group Holding Ltd | 16.92 | 4.23 | 2.61 | 8.12% | $0.99 | $2.22 | 22.68% |
| Dillard’s Inc | 9.78 | 3.15 | 0.88 | 11.4% | $0.31 | $0.74 | -4.97% |
| Nordstrom Inc | 14.02 | 3.58 | 0.27 | 15.61% | $0.44 | $1.69 | -2.17% |
| Macy’s Inc | 5.61 | 0.71 | 0.14 | 7.86% | $0.68 | $3.02 | -4.39% |
| Savers Value Village Inc | 78.86 | 4.20 | 1.18 | -1.13% | $0.03 | $0.2 | 4.51% |
| Kohl’s Corp | 6.85 | 0.20 | 0.05 | 1.26% | $0.31 | $1.92 | -9.39% |
| Hour Loop Inc | 66 | 8.99 | 0.34 | -25.78% | $-0.0 | $0.02 | -8.51% |
| Average | 35.88 | 5.3 | 1.65 | 4.94% | $7.48 | $17.21 | 6.1% |
By conducting an in-depth analysis of Amazon.com, we can identify the following trends:
-
A Price to Earnings ratio of 31.44 significantly below the industry average by 0.88x suggests undervaluation. This can make the stock appealing for those seeking growth.
-
The elevated Price to Book ratio of 6.7 relative to the industry average by 1.26x suggests company might be overvalued based on its book value.
-
The stock’s relatively high Price to Sales ratio of 3.19, surpassing the industry average by 1.93x, may indicate an aspect of overvaluation in terms of sales performance.
-
With a Return on Equity (ROE) of 5.79% that is 0.85% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
-
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.48 Billion is 4.88x above the industry average, highlighting stronger profitability and robust cash flow generation.
-
With higher gross profit of $78.69 Billion, which indicates 4.57x 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 8.62%, outperforming the industry average of 6.1%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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 examining Amazon.com in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
-
Amazon.com has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.44.
-
This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator 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 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 profitability and growth potential.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
Add Comment