Performance Comparison: Amazon.com And 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 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.

By carefully studying Amazon.com, we can deduce the following trends:

• The stock's Price to Earnings ratio of 55.35 is lower than the industry average by 0.84x, suggesting potential value in the eyes of market participants.

• The elevated Price to Book ratio of 9.49 relative to the industry average by 1.81x suggests company might be overvalued based on its book value.

• The Price to Sales ratio of 3.54, which is 2.03x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• With a Return on Equity (ROE) of 4.98% that is 1.45% 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 $25.31 Billion, which is 5.27x above the industry average, indicating stronger profitability and robust cash flow generation.

• The company has higher gross profit of $27.94 Billion, which indicates 2.19x 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 12.53% compared to the industry average of 18.87%, which indicates a challenging sales environment.

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.

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

• Amazon.com demonstrates a stronger financial position compared to its top 4 peers in the sector.

• With a lower debt-to-equity ratio of 0.62, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by 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, and gross profit reflect strong profitability and operational efficiency. However, the low revenue growth rate may raise concerns about future performance compared to industry peers.

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