In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) against its key competitors in the Broadline Retail industry. By analyzing important 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amazon.com Inc | 47.71 | 9.06 | 3.85 | 6.19% | $32.08 | $31.0 | 11.04% |
| Alibaba Group Holding Ltd | 17.45 | 1.53 | 1.58 | 4.64% | $54.02 | $92.47 | 5.21% |
| PDD Holdings Inc | 10.01 | 3.67 | 2.91 | 9.38% | $29.18 | $59.65 | 44.33% |
| MercadoLibre Inc | 59.10 | 21.10 | 4.62 | 10.37% | $0.72 | $2.44 | 35.27% |
| JD.com Inc | 11.62 | 1.66 | 0.36 | 5.22% | $15.92 | $45.04 | 5.12% |
| Coupang Inc | 39.96 | 9.76 | 1.41 | 1.74% | $0.28 | $2.27 | 27.2% |
| eBay Inc | 16.11 | 5.65 | 3.18 | 11.59% | $0.95 | $1.85 | 3.04% |
| MINISO Group Holding Ltd | 23.62 | 5.58 | 3.85 | 6.68% | $0.88 | $2.03 | 19.29% |
| Vipshop Holdings Ltd | 6.40 | 1.33 | 0.48 | 2.76% | $1.47 | $4.96 | -9.18% |
| Ollie's Bargain Outlet Holdings Inc | 35.01 | 4.46 | 3.23 | 2.24% | $0.06 | $0.21 | 7.79% |
| Dillard's Inc | 11.14 | 3.50 | 1.04 | 6.37% | $0.21 | $0.63 | -3.53% |
| Macy's Inc | 25.98 | 1.06 | 0.19 | 0.66% | $0.29 | $2.04 | -3.79% |
| Nordstrom Inc | 15.23 | 4.02 | 0.27 | 4.75% | $0.3 | $1.31 | 4.34% |
| Savers Value Village Inc | 21.85 | 3.71 | 1.10 | 5.09% | $0.07 | $0.22 | 0.53% |
| Kohl's Corp | 6.24 | 0.41 | 0.09 | 0.58% | $0.28 | $1.57 | -8.49% |
| Groupon Inc | 14.99 | 10.28 | 0.77 | 34.72% | $0.03 | $0.1 | -9.48% |
| Average | 20.98 | 5.18 | 1.67 | 7.12% | $6.98 | $14.45 | 7.84% |
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By thoroughly analyzing Amazon.com, we can discern the following trends:
The current Price to Earnings ratio of 47.71 is 2.27x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
With a Price to Book ratio of 9.06, which is 1.75x 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 3.85, surpassing the industry average by 2.31x, may indicate an aspect of overvaluation in terms of sales performance.
The company has a lower Return on Equity (ROE) of 6.19%, which is 0.93% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $32.08 Billion, which is 4.6x above the industry average, indicating stronger profitability and robust cash flow generation.
Compared to its industry, 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.
The company is experiencing remarkable revenue growth, with a rate of 11.04%, outperforming the industry average of 7.84%.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
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:
Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.
With a lower debt-to-equity ratio of 0.52, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For PE, PB, and PS ratios, Amazon.com is considered overvalued compared to its peers in the Broadline Retail industry. This is indicated by the high PE, PB, and PS ratios. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com's performance is below average within the industry sector. The low ROE suggests lower profitability, while the high EBITDA, gross profit, and revenue growth indicate strong operational performance despite lower profitability.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
