In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com AMZN in relation to its major competitors in the Broadline Retail industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight company's performance in 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 | 40.98 | 8.40 | 3.81 | 7.34% | $38.55 | $37.37 | 10.49% |
| Alibaba Group Holding Ltd | 25.93 | 2.27 | 2.35 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 12.28 | 4.50 | 3.57 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 73.64 | 26.30 | 5.76 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 12.63 | 1.80 | 0.40 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 44.86 | 10.96 | 1.59 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 17.46 | 6.13 | 3.45 | 11.59% | $0.95 | $1.85 | 3.04% |
| Dillard's Inc | 13.12 | 4.12 | 1.23 | 6.37% | $0.21 | $0.63 | -3.53% |
| Vipshop Holdings Ltd | 6.96 | 1.44 | 0.52 | 2.76% | $1.47 | $4.96 | -9.18% |
| MINISO Group Holding Ltd | 22.22 | 5.25 | 3.62 | 6.68% | $0.88 | $2.03 | 19.29% |
| Ollie's Bargain Outlet Holdings Inc | 31.66 | 4.03 | 2.92 | 2.24% | $0.06 | $0.21 | 7.79% |
| Macy's Inc | 25.13 | 1.03 | 0.18 | 0.66% | $0.29 | $2.04 | -2.68% |
| Nordstrom Inc | 15.39 | 4.07 | 0.27 | 4.75% | $0.3 | $1.31 | 4.34% |
| Savers Value Village Inc | 24.35 | 4.14 | 1.23 | 5.09% | $0.07 | $0.22 | 0.53% |
| Kohl's Corp | 5.26 | 0.34 | 0.08 | 0.58% | $0.28 | $1.57 | -8.49% |
| Groupon Inc | 19.71 | 13.52 | 1.01 | 34.72% | $0.03 | $0.1 | -9.48% |
| Hour Loop Inc | 38.60 | 10.14 | 0.47 | 7.3% | $0.0 | $0.02 | 6.6% |
| Average | 24.32 | 6.25 | 1.79 | 7.13% | $6.54 | $13.55 | 7.83% |
When conducting a detailed analysis of Amazon.com, the following trends become clear:
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At 40.98, the stock's Price to Earnings ratio significantly exceeds the industry average by 1.69x, 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 8.4 which exceeds the industry average by 1.34x.
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The stock's relatively high Price to Sales ratio of 3.81, surpassing the industry average by 2.13x, may indicate an aspect of overvaluation in terms of sales performance.
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With a Return on Equity (ROE) of 7.34% that is 0.21% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion is 5.89x above the industry average, highlighting stronger profitability and robust cash flow generation.
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With higher gross profit of $37.37 Billion, which indicates 2.76x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 10.49% is notably higher compared to the industry average of 7.83%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
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 0.46.
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. On the other hand, Amazon.com's high ROE, EBITDA, gross profit, and revenue growth suggest strong operational performance and growth potential relative to industry competitors.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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