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 | 43.96 | 8.35 | 3.54 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.84 | 1.57 | 1.62 | 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 | 72.53 | 25.90 | 5.67 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.98 | 1.71 | 0.37 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 44.77 | 10.94 | 1.59 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.20 | 5.68 | 3.20 | 11.59% | $0.95 | $1.85 | 3.04% |
| Vipshop Holdings Ltd | 6.48 | 1.34 | 0.49 | 2.76% | $1.47 | $4.96 | -9.18% |
| Dillard's Inc | 11.54 | 3.62 | 1.08 | 6.37% | $0.15 | $0.58 | -4.19% |
| Ollie's Bargain Outlet Holdings Inc | 30.82 | 3.90 | 2.82 | 3.14% | $0.08 | $0.22 | 12.41% |
| MINISO Group Holding Ltd | 18.62 | 4.32 | 3.03 | 6.26% | $0.79 | $1.77 | 24.08% |
| Macy's Inc | 24.55 | 1.03 | 0.19 | 3.53% | $0.44 | $2.16 | -3.48% |
| Nordstrom Inc | 14.32 | 3.78 | 0.25 | 4.75% | $0.4 | $1.49 | -11.04% |
| Kohl's Corp | 6.64 | 0.43 | 0.10 | 0.58% | $0.35 | $1.6 | -0.59% |
| Savers Value Village Inc | 20.11 | 3.42 | 1.02 | 5.09% | $0.07 | $0.22 | 0.53% |
| Groupon Inc | 13.57 | 9.31 | 0.70 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 21.31 | 5.37 | 1.66 | 7.34% | $6.99 | $14.45 | 7.95% |
By thoroughly analyzing Amazon.com, we can discern the following trends:
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At 43.96, the stock's Price to Earnings ratio significantly exceeds the industry average by 2.06x, suggesting a premium valuation relative to industry peers.
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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 8.35 which exceeds the industry average by 1.55x.
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The stock's relatively high Price to Sales ratio of 3.54, surpassing the industry average by 2.13x, may indicate an aspect of overvaluation in terms of 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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Compared to its industry, 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 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 7.95%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile 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:
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When comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.52.
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.
