Analyzing Amazon.com In Comparison To Competitors In Broadline Retail Industry

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.com Background

Amazon is the leading online retailer and marketplace for third party sellers. Retail related revenue represents approximately 74% of total, followed by Amazon Web Services (17%), and advertising services (9%). International segments constitute 22% of Amazon's total revenue, 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	32.42	6.64	3.59	6.02%	$45.5	$91.5	13.4%
Alibaba Group Holding Ltd	21.40	2.59	2.65	2.05%	$27.26	$97.01	4.77%
PDD Holdings Inc	12.07	3.02	2.95	7.79%	$25.03	$61.44	8.98%
MercadoLibre Inc	50.44	16.85	4	7.06%	$0.88	$3.21	39.48%
Sea Ltd	58.51	7.78	4.02	3.77%	$0.48	$2.6	38.3%
Coupang Inc	129.10	10.45	1.51	2.02%	$0.32	$2.72	17.81%
JD.com Inc	9.95	1.29	0.24	2.3%	$7.36	$50.47	14.85%
eBay Inc	18.29	7.90	3.65	13.35%	$0.74	$2.0	9.47%
Dillard's Inc	18.98	5.33	1.66	6.55%	$0.14	$0.58	-2.93%
Vipshop Holdings Ltd	10.68	1.74	0.70	3.06%	$1.55	$4.91	3.36%
Ollie's Bargain Outlet Holdings Inc	35.17	4.17	3.07	3.49%	$0.09	$0.27	17.49%
Global E Online Ltd	1016.50	7.40	7.96	1.43%	$0.02	$0.1	25.46%
Macy's Inc	13.44	1.40	0.28	0.25%	$0.36	$2.1	-1.72%
MINISO Group Holding Ltd	19.59	3.86	2.12	4.08%	$0.79	$2.59	28.17%
Kohl's Corp	13.32	0.66	0.17	0.2%	$0.25	$1.52	-3.64%
Hour Loop Inc	67.67	9.31	0.51	7.15%	$0.0	$0.02	7.56%
Average	99.67	5.58	2.37	4.3%	$4.35	$15.44	13.83%

Upon closer analysis of Amazon.com, the following trends become apparent:

• At 32.42, the stock's Price to Earnings ratio is 0.33x less than the industry average, suggesting favorable growth potential.

• With a Price to Book ratio of 6.64, which is 1.19x 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 3.59, surpassing the industry average by 1.51x, may indicate an aspect of overvaluation in terms of sales performance.

• With a Return on Equity (ROE) of 6.02% that is 1.72% 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 $45.5 Billion, which is 10.46x above the industry average, indicating stronger profitability and robust cash flow generation.

• The company has higher gross profit of $91.5 Billion, which indicates 5.93x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company is witnessing a substantial decline in revenue growth, with a rate of 13.4% compared to the industry average of 13.83%, which indicates a challenging sales environment.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.

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 evaluating Amazon.com alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

• Among its top 4 peers, Amazon.com has a stronger financial position with a lower debt-to-equity ratio of 0.37.

• 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.

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 overvaluation relative to industry standards. In terms of ROE, EBITDA, and gross profit, Amazon.com demonstrates strong performance compared to industry peers. However, the low revenue growth rate may raise concerns about future prospects in the industry sector.

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