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In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.
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 | 34.60 | 7.25 | 3.65 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 20.72 | 2.92 | 3.07 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 14.84 | 3.85 | 3.55 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 56.37 | 20.25 | 4.80 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 82.53 | 9.79 | 5.15 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 158.70 | 12.35 | 1.82 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.54 | 1.52 | 0.29 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 21.78 | 9.43 | 4.50 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 9.99 | 1.66 | 0.65 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 17.01 | 5.01 | 1.48 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 36 | 4.26 | 3.15 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 20.90 | 4.43 | 2.63 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 11.01 | 1.17 | 0.24 | 1.95% | $0.36 | $2.1 | -1.9% |
| Savers Value Village Inc | 67.45 | 4.96 | 1.40 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.80 | 0.47 | 0.12 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 74.33 | 10.95 | 0.57 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 40.66 | 6.2 | 2.23 | 5.5% | $6.19 | $16.6 | 10.76% |
By conducting an in-depth analysis of Amazon.com, we can identify the following trends:
A Price to Earnings ratio of 34.6 significantly below the industry average by 0.85x suggests undervaluation. This can make the stock appealing for those seeking growth.
With a Price to Book ratio of 7.25, which is 1.17x the industry average, Amazon.com might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
The stock's relatively high Price to Sales ratio of 3.65, surpassing the industry average by 1.64x, may indicate an aspect of overvaluation in terms of sales performance.
With a Return on Equity (ROE) of 5.68% that is 0.18% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $36.6 Billion, which is 5.91x above the industry average, indicating stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $86.89 Billion, which indicates 5.23x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company's revenue growth of 13.33% exceeds the industry average of 10.76%, indicating strong sales performance and market outperformance.
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:
Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.4.
This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
For Amazon.com, the PE, PB, and PS ratios indicate that the stock is relatively undervalued compared to its peers in the Broadline Retail industry. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth suggest that Amazon.com is performing exceptionally well and outpacing its industry competitors in terms of profitability and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: AMZN
