Market Analysis: Amazon.com And Competitors In Broadline Retail Industry
The article analyzes Amazon.com in the Broadline Retail industry, comparing it with competitors like Alibaba and JD.com. Key financial metrics show Amazon's PE ratio at 32.26, lower than the industry average, indicating potential undervaluation. However, its high PB and PS ratios suggest overvaluation based on book value and sales. Amazon leads in ROE, EBITDA, gross profit, and revenue growth, reflecting strong financial performance. The debt-to-equity ratio of 0.46 indicates a favorable financial position compared to peers. Overall, Amazon demonstrates robust profitability and growth potential in the competitive landscape.
In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Amazon.com AMZN in relation to its major competitors in the Broadline Retail industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 | 32.26 | 6.61 | 3 | 7.34% | $38.55 | $37.37 | 10.49% |
| Alibaba Group Holding Ltd | 18.87 | 2.24 | 2.34 | 5.01% | $59.0 | $117.63 | 7.61% |
| PDD Holdings Inc | 10.87 | 3.66 | 3.10 | 9.28% | $29.18 | $59.65 | 11.33% |
| MercadoLibre Inc | 51.62 | 22.67 | 4.75 | 15.3% | $0.96 | $2.75 | 37.42% |
| JD.com Inc | 10.80 | 1.76 | 0.39 | 4.21% | $15.92 | $45.04 | 33.26% |
| Coupang Inc | 268.25 | 9.44 | 1.29 | 3.76% | $0.44 | $2.49 | 21.4% |
| eBay Inc | 16.80 | 6 | 3.23 | 12.84% | $0.76 | $1.86 | 0.66% |
| Vipshop Holdings Ltd | 7.51 | 1.39 | 0.54 | 6.31% | $1.47 | $4.96 | 60.69% |
| Ollie's Bargain Outlet Holdings Inc | 36.37 | 4.24 | 3.19 | 4.14% | $0.1 | $0.27 | 2.79% |
| MINISO Group Holding Ltd | 15.64 | 3.93 | 2.41 | 8.12% | $0.88 | $2.03 | 4.2% |
| Dillard's Inc | 8.71 | 2.84 | 0.78 | 11.4% | $0.31 | $0.74 | -4.97% |
| Nordstrom Inc | 13.77 | 3.51 | 0.27 | 15.61% | $0.44 | $1.69 | -2.17% |
| Macy's Inc | 5.51 | 0.70 | 0.14 | 7.86% | $0.68 | $3.02 | -4.39% |
| Savers Value Village Inc | 41.82 | 2.68 | 0.77 | -0.44% | $0.04 | $0.22 | 5.02% |
| Kohl's Corp | 6.78 | 0.19 | 0.05 | 1.26% | $0.31 | $1.92 | -9.39% |
| Hour Loop Inc | 68.50 | 9.33 | 0.35 | -25.78% | $-0.0 | $0.02 | -8.51% |
| Average | 38.79 | 4.97 | 1.57 | 5.26% | $7.37 | $16.29 | 10.33% |
Upon a comprehensive analysis of Amazon.com, the following trends can be discerned:
The stock's Price to Earnings ratio of 32.26 is lower than the industry average by 0.83x, suggesting potential value in the eyes of market participants.
The elevated Price to Book ratio of 6.61 relative to the industry average by 1.33x suggests company might be overvalued based on its book value.
The Price to Sales ratio of 3.0, which is 1.91x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The Return on Equity (ROE) of 7.34% is 2.08% above the industry average, highlighting efficient use of equity to generate profits.
With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.23x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $37.37 Billion, which indicates 2.29x 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 10.49%, outperforming the industry average of 10.33%.
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.
By evaluating Amazon.com against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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, the PE ratio is low compared to its peers in the Broadline Retail industry, indicating potential undervaluation. The high PB and PS ratios suggest that the market values Amazon.com's assets and sales highly. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com outperforms its industry peers, reflecting strong financial performance and growth potential.
This article was generated by Benzinga's automated content engine and reviewed by an editor.