In today's rapidly changing and fiercely competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies. In this article, we will conduct a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By examining key 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 | 45.02 | 8.55 | 3.63 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.68 | 1.56 | 1.60 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 9.75 | 3.57 | 2.83 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 69.26 | 24.73 | 5.41 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 12.05 | 1.72 | 0.38 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 43.68 | 10.67 | 1.55 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 15.91 | 5.58 | 3.14 | 11.59% | $0.95 | $1.85 | 3.04% |
| Vipshop Holdings Ltd | 6.55 | 1.36 | 0.49 | 2.76% | $1.47 | $4.96 | -9.18% |
| Dillard's Inc | 11.68 | 3.67 | 1.10 | 6.37% | $0.15 | $0.58 | -4.19% |
| MINISO Group Holding Ltd | 22.96 | 5.42 | 3.74 | 6.26% | $0.79 | $1.77 | 24.08% |
| Ollie's Bargain Outlet Holdings Inc | 30.45 | 3.85 | 2.79 | 3.14% | $0.08 | $0.22 | 12.41% |
| Macy's Inc | 26.05 | 1.09 | 0.20 | 3.53% | $0.44 | $2.16 | -3.48% |
| Nordstrom Inc | 14.59 | 3.85 | 0.26 | 4.75% | $0.4 | $1.49 | -11.04% |
| Kohl's Corp | 6.95 | 0.45 | 0.10 | 0.58% | $0.35 | $1.6 | -0.59% |
| Savers Value Village Inc | 20.74 | 3.52 | 1.05 | 5.09% | $0.07 | $0.22 | 0.53% |
| Groupon Inc | 13.84 | 9.50 | 0.71 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.48 | 5.37 | 1.69 | 7.34% | $6.99 | $14.45 | 7.95% |
By analyzing Amazon.com, we can infer the following trends:
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The current Price to Earnings ratio of 45.02 is 2.1x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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With a Price to Book ratio of 8.55, which is 1.59x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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With a relatively high Price to Sales ratio of 3.63, which is 2.15x 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 1.15% below the industry average, suggesting 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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The gross profit of $31.0 Billion is 2.15x 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 11.04% is notably higher compared to the industry average of 7.95%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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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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 0.52, which can be perceived as a positive aspect 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 significant 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 compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
