In the dynamic 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) and its primary competitors in the Broadline Retail industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 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 | 44.41 | 8.43 | 3.58 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.52 | 1.54 | 1.59 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 9.78 | 3.59 | 2.84 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 74.85 | 26.73 | 5.85 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.36 | 1.62 | 0.36 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 44.31 | 10.83 | 1.57 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.40 | 5.75 | 3.24 | 11.59% | $0.95 | $1.85 | 3.04% |
| Dillard's Inc | 11.61 | 3.64 | 1.09 | 6.37% | $0.15 | $0.58 | -4.19% |
| Vipshop Holdings Ltd | 6.26 | 1.30 | 0.47 | 2.76% | $1.47 | $4.96 | -9.18% |
| Ollie's Bargain Outlet Holdings Inc | 30.76 | 3.89 | 2.82 | 3.14% | $0.08 | $0.22 | 12.41% |
| MINISO Group Holding Ltd | 17.50 | 4.06 | 2.85 | 6.26% | $0.79 | $1.77 | 24.08% |
| Macy's Inc | 24.45 | 1.02 | 0.19 | 3.53% | $0.44 | $2.16 | -3.48% |
| Nordstrom Inc | 14.23 | 4.26 | 0.27 | 4.75% | $0.4 | $1.49 | -11.04% |
| Kohl's Corp | 6.86 | 0.45 | 0.10 | 0.58% | $0.35 | $1.6 | -0.59% |
| Savers Value Village Inc | 20.54 | 3.49 | 1.04 | 5.09% | $0.07 | $0.22 | 0.53% |
| Groupon Inc | 13.25 | 9.09 | 0.68 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.31 | 5.42 | 1.66 | 7.34% | $6.99 | $14.45 | 7.95% |
When analyzing Amazon.com, the following trends become evident:
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The current Price to Earnings ratio of 44.41 is 2.08x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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The elevated Price to Book ratio of 8.43 relative to the industry average by 1.56x suggests company might be overvalued based on its book value.
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With a relatively high Price to Sales ratio of 3.58, which is 2.16x the industry average, the stock might be considered overvalued based on sales performance.
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With a Return on Equity (ROE) of 6.19% that is 1.15% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
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The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.59x above the industry average, indicating stronger profitability and robust cash flow generation.
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With higher gross profit of $31.0 Billion, which indicates 2.15x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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With a revenue growth of 11.04%, which surpasses the industry average of 7.95%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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.
In terms of the Debt-to-Equity ratio, Amazon.com can be assessed by comparing it to its top 4 peers, resulting in the following observations:
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Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.52.
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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, PB, and PS ratios are all high compared to its peers in the Broadline Retail industry, indicating that the stock may be overvalued. The low ROE suggests that Amazon.com is not generating strong returns on shareholder equity. However, the high EBITDA, gross profit, and revenue growth show that the company is performing well in terms of operational efficiency and revenue generation within the industry sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
