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.

Upon a comprehensive analysis of Amazon.com, the following trends can be discerned:

• A Price to Earnings ratio of 36.37 significantly below the industry average by 0.93x suggests undervaluation. This can make the stock appealing for those seeking growth.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 7.45 which exceeds the industry average by 1.41x.

• The Price to Sales ratio of 3.38, which is 2.07x 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 7.34%, which is 0.12% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

• Compared to its industry, 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.

• The gross profit of $37.37 Billion is 2.3x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 10.49% is significantly lower compared to the industry average of 16.17%. This indicates a potential fall in the company's sales performance.

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 can be assessed by comparing it to its top 4 peers, resulting in the following observations:

• 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 Amazon.com in the Broadline Retail industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB and PS ratios are high, suggesting rich valuation relative to industry peers. In terms of ROE, Amazon.com shows lower profitability compared to peers. However, its high EBITDA and gross profit margins reflect strong operational efficiency. The low revenue growth rate may pose a challenge for Amazon.com in the competitive industry landscape.

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