Industry Comparison: Evaluating Amazon.com Against Competitors In Broadline Retail Industry

In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Amazon.com (NASDAQ:AMZN) alongside its primary competitors in the Broadline Retail industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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	32.78	6.71	3.63	6.02%	$45.5	$91.5	13.4%
Alibaba Group Holding Ltd	19.95	2.41	2.47	2.05%	$27.26	$97.01	4.77%
PDD Holdings Inc	11.64	2.91	2.84	7.79%	$25.03	$61.44	8.98%
MercadoLibre Inc	49.18	16.43	3.90	7.06%	$0.88	$3.21	39.48%
Sea Ltd	57.16	7.60	3.93	3.77%	$0.48	$2.6	38.3%
Coupang Inc	116.48	9.42	1.36	2.02%	$0.32	$2.72	17.81%
JD.com Inc	9.68	1.26	0.24	2.3%	$7.36	$50.47	14.85%
eBay Inc	19.45	8.40	3.88	13.35%	$0.74	$2.0	9.47%
Vipshop Holdings Ltd	10.22	1.66	0.67	3.06%	$1.55	$4.91	3.36%
Dillard's Inc	17.18	4.83	1.50	6.55%	$0.21	$0.66	2.74%
Global E Online Ltd	1002.50	7.29	7.85	1.43%	$0.02	$0.1	25.46%
Ollie's Bargain Outlet Holdings Inc	30.69	3.71	2.70	2.55%	$0.08	$0.25	18.59%
Macy's Inc	13	1.36	0.27	0.25%	$0.27	$2.06	0.2%
MINISO Group Holding Ltd	19.47	3.83	2.10	4.08%	$0.79	$2.59	28.17%
Kohl's Corp	12.06	0.60	0.15	0.2%	$0.25	$1.52	-3.64%
Hour Loop Inc	61.67	8.48	0.46	7.15%	$0.0	$0.02	7.56%
Average	96.69	5.35	2.29	4.24%	$4.35	$15.44	14.41%

By closely studying Amazon.com, we can observe the following trends:

• The Price to Earnings ratio of 32.78 is 0.34x lower than the industry average, indicating potential undervaluation for the stock.

• It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 6.71 which exceeds the industry average by 1.25x.

• The stock's relatively high Price to Sales ratio of 3.63, surpassing the industry average by 1.59x, may indicate an aspect of overvaluation in terms of sales performance.

• The Return on Equity (ROE) of 6.02% is 1.78% above the industry average, highlighting efficient use of equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $45.5 Billion is 10.46x above the industry average, highlighting stronger profitability and robust cash flow generation.

• Compared to its industry, 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 14.41%, which indicates a challenging sales environment.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.

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 considering the debt-to-equity ratio, Amazon.com exhibits a stronger financial position compared to its top 4 peers.

• This indicates that the company has a favorable balance between debt and equity, with a lower debt-to-equity ratio of 0.37, which can be perceived as a positive aspect 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 competitors. In terms of ROE, EBITDA, gross profit, and revenue growth, Amazon.com demonstrates strong performance compared to its peers in the industry sector analysis.

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