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 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 | 43.04 | 8.17 | 3.47 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.61 | 1.55 | 1.60 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 9.92 | 3.64 | 2.88 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 74.49 | 26.60 | 5.82 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.10 | 1.59 | 0.35 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 43.95 | 10.74 | 1.56 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.37 | 5.74 | 3.23 | 11.59% | $0.95 | $1.85 | 3.04% |
| Dillard's Inc | 12.02 | 3.77 | 1.13 | 6.37% | $0.15 | $0.58 | -4.19% |
| Vipshop Holdings Ltd | 6.45 | 1.34 | 0.48 | 2.76% | $1.47 | $4.96 | -9.18% |
| Ollie's Bargain Outlet Holdings Inc | 30.66 | 3.88 | 2.81 | 3.14% | $0.08 | $0.22 | 12.41% |
| MINISO Group Holding Ltd | 17 | 3.94 | 2.77 | 6.26% | $0.79 | $1.77 | 24.08% |
| Macy's Inc | 24.52 | 1.03 | 0.19 | 3.53% | $0.44 | $2.16 | -3.48% |
| Nordstrom Inc | 14.39 | 4.31 | 0.28 | 13.68% | $0.4 | $1.49 | 3.23% |
| Kohl's Corp | 7.19 | 0.53 | 0.12 | 1.73% | $0.35 | $1.6 | -4.18% |
| Savers Value Village Inc | 21.04 | 3.58 | 1.06 | 5.09% | $0.07 | $0.22 | 0.53% |
| Groupon Inc | 13.81 | 9.48 | 0.71 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.37 | 5.45 | 1.67 | 8.01% | $6.99 | $14.45 | 8.66% |
Upon a comprehensive analysis of Amazon.com, the following trends can be discerned:
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The Price to Earnings ratio of 43.04 for this company is 2.01x above the industry average, indicating a premium valuation associated with the stock.
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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 8.17 which exceeds the industry average by 1.5x.
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With a relatively high Price to Sales ratio of 3.47, which is 2.08x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 6.19% is 1.82% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion is 4.59x above the industry average, highlighting stronger profitability and robust cash flow generation.
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The company has higher gross profit of $31.0 Billion, which indicates 2.15x above the industry average, indicating stronger profitability and higher earnings from its core operations.
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The company is experiencing remarkable revenue growth, with a rate of 11.04%, outperforming the industry average of 8.66%.
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.
In terms of the Debt-to-Equity ratio, Amazon.com stands in comparison with its top 4 peers, leading to the following comparisons:
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In terms of the debt-to-equity ratio, Amazon.com has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.
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This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.52.
Key Takeaways
For PE, PB, and PS ratios, Amazon.com is considered overvalued compared to its peers in the Broadline Retail industry. This is indicated by the high PE, PB, and PS ratios. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com's performance is below average within the industry sector. The low ROE and high EBITDA, gross profit, and revenue growth suggest potential areas for improvement in Amazon.com's financial performance compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
