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 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.

By analyzing Amazon.com, we can infer the following trends:

• With a Price to Earnings ratio of 37.2, which is 0.96x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• The elevated Price to Book ratio of 7.62 relative to the industry average by 1.46x suggests company might be overvalued based on its book value.

• The Price to Sales ratio of 3.46, which is 2.11x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• With a Return on Equity (ROE) of 7.34% that is 0.12% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.24x above the industry average, indicating stronger profitability and robust cash flow generation.

• With higher gross profit of $37.37 Billion, which indicates 2.3x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• With a revenue growth of 10.49%, which is much lower than the industry average of 16.17%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.

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.

When comparing Amazon.com with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

• When comparing the debt-to-equity ratio, Amazon.com is in a stronger financial position compared to its top 4 peers.

• 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 0.46.

Key Takeaways

For the PE, PB, and PS ratios, Amazon.com is considered to have a low PE ratio, indicating potential undervaluation compared to its peers. However, its high PB and PS ratios suggest that the market values the company's assets and sales more highly. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com shows lower profitability and growth compared to its industry peers, which may impact its overall valuation within the Broadline Retail sector.

This article was generated by Benzinga's automated content engine and reviewed by an editor.