In today's rapidly changing and highly competitive business world, it is vital for investors and industry enthusiasts to carefully assess 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 | 47.13 | 8.95 | 3.80 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.37 | 1.53 | 1.57 | 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 | 70.41 | 25.15 | 5.50 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.75 | 1.68 | 0.37 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 42.24 | 10.32 | 1.50 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.03 | 5.62 | 3.16 | 11.59% | $0.95 | $1.85 | 3.04% |
| MINISO Group Holding Ltd | 24.84 | 5.87 | 4.05 | 6.68% | $0.88 | $2.03 | 19.29% |
| Vipshop Holdings Ltd | 6.33 | 1.31 | 0.47 | 2.76% | $1.47 | $4.96 | -9.18% |
| Dillard's Inc | 11.39 | 3.58 | 1.07 | 6.37% | $0.15 | $0.58 | -4.19% |
| Ollie's Bargain Outlet Holdings Inc | 30.58 | 3.87 | 2.80 | 3.14% | $0.08 | $0.22 | 12.41% |
| Macy's Inc | 25.31 | 1.06 | 0.20 | 3.53% | $0.44 | $2.16 | -3.48% |
| Nordstrom Inc | 14.85 | 3.92 | 0.26 | 4.75% | $0.4 | $1.49 | -11.04% |
| Kohl's Corp | 6.93 | 0.45 | 0.10 | 0.58% | $0.35 | $1.6 | -0.59% |
| Savers Value Village Inc | 21 | 3.57 | 1.06 | 5.09% | $0.07 | $0.22 | 0.53% |
| Groupon Inc | 16.83 | 11.54 | 0.86 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.71 | 5.54 | 1.72 | 7.37% | $7.0 | $14.47 | 7.63% |
Upon a comprehensive analysis of Amazon.com, the following trends can be discerned:
-
The Price to Earnings ratio of 47.13 for this company is 2.17x above the industry average, indicating a premium valuation associated with the stock.
-
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 8.95 which exceeds the industry average by 1.62x.
-
The Price to Sales ratio of 3.8, which is 2.21x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
-
The company has a lower Return on Equity (ROE) of 6.19%, which is 1.18% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
-
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.58x above the industry average, indicating stronger profitability and robust cash flow generation.
-
The company has higher gross profit of $31.0 Billion, which indicates 2.14x above the industry average, indicating stronger profitability and higher earnings from its core operations.
-
The company's revenue growth of 11.04% is notably higher compared to the industry average of 7.63%, showcasing exceptional sales performance and strong demand for its products or services.
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 can be assessed by comparing it to its top 4 peers, resulting in the following observations:
-
When considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.
-
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 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 compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
