Investigating Amazon.com's Standing In Broadline Retail Industry Compared To Competitors

In today's fast-paced and highly competitive business world, it is crucial for investors and industry followers to conduct comprehensive company evaluations. In this article, we will delve into an extensive industry comparison, evaluating Amazon.com (NASDAQ:AMZN) in relation to its major competitors in the Broadline Retail industry. By closely examining key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and highlight 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 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	32.84	6.73	3.63	6.02%	$45.5	$91.5	13.4%
Alibaba Group Holding Ltd	19.80	2.39	2.45	2.05%	$27.26	$97.01	4.77%
PDD Holdings Inc	11.61	2.90	2.84	7.79%	$25.03	$61.44	8.98%
MercadoLibre Inc	49.33	16.48	3.91	7.06%	$0.88	$3.21	39.48%
Sea Ltd	56.05	7.45	3.85	3.77%	$0.48	$2.6	38.3%
Coupang Inc	114.90	9.30	1.34	2.02%	$0.32	$2.72	17.81%
JD.com Inc	9.49	1.23	0.23	2.3%	$7.36	$50.47	14.85%
eBay Inc	19.31	8.34	3.85	13.35%	$0.74	$2.0	9.47%
Dillard's Inc	16.65	4.68	1.45	6.55%	$0.21	$0.66	2.74%
Vipshop Holdings Ltd	9.51	1.55	0.62	3.06%	$1.55	$4.91	3.36%
Ollie's Bargain Outlet Holdings Inc	30.33	3.66	2.67	2.55%	$0.08	$0.25	18.59%
Global E Online Ltd	988.25	7.19	7.74	1.43%	$0.02	$0.1	25.46%
Macy's Inc	13.02	1.36	0.27	0.25%	$0.27	$2.06	0.2%
MINISO Group Holding Ltd	19.12	3.76	2.07	4.08%	$0.79	$2.59	28.17%
Kohl's Corp	11.76	0.58	0.15	0.2%	$0.25	$1.52	-3.64%
Hour Loop Inc	63	8.67	0.47	7.15%	$0.0	$0.02	7.56%
Average	95.48	5.3	2.26	4.24%	$4.35	$15.44	14.41%

By conducting an in-depth analysis of Amazon.com, we can identify the following trends:

• With a Price to Earnings ratio of 32.84, which is 0.34x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• The elevated Price to Book ratio of 6.73 relative to the industry average by 1.27x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 3.63, surpassing the industry average by 1.61x, may indicate an aspect of overvaluation in terms of sales performance.

• The company has a higher Return on Equity (ROE) of 6.02%, which is 1.78% 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 $45.5 Billion, which is 10.46x above the industry average, indicating stronger profitability and robust cash flow generation.

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

• With a revenue growth of 13.4%, which is much lower than the industry average of 14.41%, the company is experiencing a notable slowdown in sales expansion.

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.

In light of the Debt-to-Equity ratio, a comparison between Amazon.com and its top 4 peers reveals the following information:

• In terms of the debt-to-equity ratio, Amazon.com has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.37.

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, and gross profit reflect strong profitability and operational efficiency. However, the low revenue growth rate may indicate a slower expansion compared to industry peers.

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