Exploring The Competitive Space: Amazon.com Versus Industry Peers In Broadline Retail
The article compares Amazon.com with its competitors in the Broadline Retail industry, analyzing key financial metrics such as P/E, P/B, and revenue growth. Amazon shows a lower P/E ratio, indicating potential undervaluation, while its high P/B and P/S ratios suggest strong market valuation. The company outperforms peers in ROE, EBITDA, gross profit, and revenue growth, reflecting robust financial health. Additionally, Amazon's lower debt-to-equity ratio indicates a favorable balance between debt and equity, making it an attractive option for investors.
In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. 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.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amazon.com Inc | 33.73 | 6.92 | 3.13 | 7.34% | $38.55 | $88.9 | 10.49% |
| Alibaba Group Holding Ltd | 17.50 | 2.08 | 2.17 | 5.01% | $59.0 | $117.63 | 7.61% |
| PDD Holdings Inc | 9.94 | 3.35 | 2.84 | 9.28% | $29.18 | $59.65 | 11.33% |
| MercadoLibre Inc | 58.50 | 25.69 | 5.38 | 15.3% | $0.96 | $2.75 | 37.42% |
| JD.com Inc | 8.84 | 1.44 | 0.32 | 4.21% | $12.54 | $53.12 | 13.37% |
| Coupang Inc | 290.50 | 10.26 | 1.40 | 3.76% | $0.44 | $2.49 | 21.4% |
| eBay Inc | 17.01 | 6.07 | 3.27 | 12.84% | $0.76 | $1.86 | 0.66% |
| Vipshop Holdings Ltd | 6.66 | 1.23 | 0.48 | 6.31% | $3.29 | $7.63 | -4.18% |
| Ollie's Bargain Outlet Holdings Inc | 32.64 | 3.81 | 2.87 | 4.14% | $0.1 | $0.27 | 2.79% |
| MINISO Group Holding Ltd | 14.99 | 3.75 | 2.31 | 8.12% | $0.88 | $2.03 | 4.2% |
| Dillard's Inc | 8.94 | 2.88 | 0.81 | 11.4% | $0.31 | $0.74 | -4.97% |
| Nordstrom Inc | 13.93 | 3.55 | 0.27 | 15.61% | $0.44 | $1.69 | -2.17% |
| Macy's Inc | 5.32 | 0.67 | 0.13 | 7.86% | $0.68 | $3.02 | -4.39% |
| Savers Value Village Inc | 56.65 | 3.60 | 1.04 | -0.44% | $0.04 | $0.22 | 5.02% |
| Kohl's Corp | 7.17 | 0.21 | 0.05 | 1.26% | $0.31 | $1.92 | -9.39% |
| Hour Loop Inc | 68 | 9.27 | 0.35 | -25.78% | $-0.0 | $0.02 | -8.51% |
| Average | 41.11 | 5.19 | 1.58 | 5.26% | $7.26 | $17.0 | 4.68% |
By closely examining Amazon.com, we can identify the following trends:
The Price to Earnings ratio of 33.73 is 0.82x lower than the industry average, indicating potential undervaluation for the stock.
With a Price to Book ratio of 6.92, which is 1.33x 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.
With a relatively high Price to Sales ratio of 3.13, which is 1.98x the industry average, the stock might be considered overvalued based on sales performance.
The company has a higher Return on Equity (ROE) of 7.34%, which is 2.08% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $38.55 Billion, which is 5.31x above the industry average, indicating stronger profitability and robust cash flow generation.
Compared to its industry, the company has higher gross profit of $88.9 Billion, which indicates 5.23x above the industry average, indicating stronger profitability and higher earnings from its core operations.
With a revenue growth of 10.49%, which surpasses the industry average of 4.68%, the company is demonstrating robust sales expansion and gaining market share.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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 assessing Amazon.com against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
Amazon.com exhibits a stronger financial position compared to its top 4 peers in the sector, as indicated by its lower debt-to-equity ratio of 0.46.
This suggests that the company has a more favorable balance between debt and equity, which can be seen as a positive aspect for investors.
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. Amazon.com's high ROE, EBITDA, gross profit, and revenue growth outperform 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.
