Understanding Amazon.com's Position In Broadline Retail Industry Compared To Competitors
In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 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 | 32.19 | 6.59 | 3.56 | 6.02% | $45.5 | $91.5 | 13.4% |
| Alibaba Group Holding Ltd | 21.08 | 2.55 | 2.61 | 2.05% | $27.26 | $97.01 | 4.77% |
| PDD Holdings Inc | 12.02 | 3 | 2.94 | 7.79% | $25.03 | $61.44 | 8.98% |
| MercadoLibre Inc | 50.63 | 16.91 | 4.02 | 7.06% | $0.88 | $3.21 | 39.48% |
| Sea Ltd | 56.18 | 7.47 | 3.86 | 3.77% | $0.48 | $2.6 | 38.3% |
| Coupang Inc | 128.24 | 10.38 | 1.50 | 2.02% | $0.32 | $2.72 | 17.81% |
| JD.com Inc | 9.88 | 1.29 | 0.24 | 2.3% | $7.36 | $50.47 | 14.85% |
| eBay Inc | 18.60 | 8.04 | 3.71 | 13.35% | $0.74 | $2.0 | 9.47% |
| Dillard's Inc | 19.36 | 5.44 | 1.69 | 6.55% | $0.21 | $0.66 | 2.74% |
| Vipshop Holdings Ltd | 10.70 | 1.74 | 0.70 | 3.06% | $1.55 | $4.91 | 3.36% |
| Ollie's Bargain Outlet Holdings Inc | 31.60 | 3.82 | 2.78 | 3.49% | $0.09 | $0.27 | 17.49% |
| Global E Online Ltd | 983 | 7.15 | 7.70 | 1.43% | $0.02 | $0.1 | 25.46% |
| Macy's Inc | 13.28 | 1.38 | 0.28 | 0.25% | $0.36 | $2.1 | -1.72% |
| MINISO Group Holding Ltd | 20.01 | 3.94 | 2.16 | 4.08% | $0.79 | $2.59 | 28.17% |
| Kohl's Corp | 13.53 | 0.67 | 0.17 | 0.2% | $0.25 | $1.52 | -3.64% |
| Hour Loop Inc | 67.67 | 9.31 | 0.51 | 7.15% | $0.0 | $0.02 | 7.56% |
| Average | 97.05 | 5.54 | 2.32 | 4.3% | $4.36 | $15.44 | 14.21% |
Upon analyzing Amazon.com, the following trends can be observed:
The stock's Price to Earnings ratio of 32.19 is lower than the industry average by 0.33x, suggesting potential value in the eyes of market participants.
The elevated Price to Book ratio of 6.59 relative to the industry average by 1.19x suggests company might be overvalued based on its book value.
The Price to Sales ratio of 3.56, which is 1.53x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 6.02% is 1.72% above the industry average, highlighting efficient use of equity to generate profits.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion is 10.44x above the industry average, highlighting stronger profitability and robust cash flow generation.
With higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of 13.4%, which is much lower than the industry average of 14.21%, the company is experiencing a notable slowdown in sales expansion.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage 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, which may impact future valuation compared to industry counterparts.
This article was generated by Benzinga's automated content engine and reviewed by an editor.