Evaluating Amazon.com Compared to Key Broadline Retail Competitors
Understanding Amazon.com's Market Position
In a dynamic business environment, it’s crucial for investors and enthusiasts to assess company performances, especially in the fast-evolving retail sector. This article delves into a comparative analysis of Amazon.com (NASDAQ: AMZN) against its main rivals in the broadline retail industry. By closely examining key financial metrics, market positioning, and growth trajectories, we aim to offer valuable perspectives for investors eager to understand Amazon's place within this competitive landscape.
Amazon.com Overview
Amazon stands as the preeminent online retailer and a well-known marketplace for various sellers. Retail-related revenues make up around 75% of its total earnings, while Amazon Web Services contributes about 15% through cloud computing and related services. The remaining percentage is achieved through advertising services and other diverse offerings. Notably, its international markets account for 25% to 30% of total non-AWS revenue, with significant contributions from regions such as Europe and Asia.
Comparative Financial Metrics
When comparing financial performances, looking at essential metrics is critical. Below are key statistics that spotlight Amazon's financial health against other prominent competitors in the broadline retail space.
| Company | P/E Ratio | P/B Ratio | P/S Ratio | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Amazon.com Inc | 34.78 | 7.29 | 3.67 | 5.68% | $36.6 | $86.89 | 13.33% |
| Alibaba Group Holding Ltd | 17.90 | 2.60 | 2.65 | 4.26% | $53.52 | $111.22 | 1.82% |
| PDD Holdings Inc | 13.51 | 3.50 | 3.23 | 8.89% | $25.79 | $58.13 | 7.14% |
| MercadoLibre Inc | 57.78 | 20.76 | 4.92 | 9.76% | $0.95 | $3.09 | 33.85% |
| Sea Ltd | 101.06 | 11.99 | 6.30 | 4.36% | $0.58 | $2.41 | 38.16% |
| Coupang Inc | 162.05 | 12.61 | 1.86 | 0.71% | $0.34 | $2.56 | 16.4% |
| JD.com Inc | 9.39 | 1.50 | 0.29 | 2.68% | $7.34 | $56.64 | 22.4% |
| eBay Inc | 20.18 | 8.74 | 4.17 | 7.59% | $0.65 | $1.95 | 6.14% |
| Vipshop Holdings Ltd | 9.73 | 1.62 | 0.64 | 3.74% | $1.91 | $6.05 | -3.98% |
| Dillard's Inc | 15.87 | 4.68 | 1.38 | 3.86% | $0.14 | $0.58 | 1.41% |
| Ollie's Bargain Outlet Holdings Inc | 38.12 | 4.52 | 3.33 | 3.49% | $0.09 | $0.27 | 17.49% |
| MINISO Group Holding Ltd | 23.30 | 4.96 | 2.93 | 4.56% | $0.73 | $2.2 | 23.07% |
| Macy's Inc | 9.63 | 1.02 | 0.21 | 1.95% | $0.31 | $2.0 | 4.3% |
| Savers Value Village Inc | 62.20 | 4.57 | 1.29 | 4.52% | $0.06 | $0.23 | 7.9% |
| Kohl's Corp | 8.23 | 0.44 | 0.11 | 3.97% | $0.45 | $1.53 | -4.98% |
| Hour Loop Inc | 119.67 | 17.63 | 0.91 | 18.14% | $0.0 | $0.02 | -3.45% |
| Average | 44.57 | 6.74 | 2.28 | 5.5% | $6.19 | $16.59 | 11.18% |
Evaluating Performance Trends
Through careful analysis of Amazon.com, we can derive several notable trends about its financial standing:
The Price to Earnings ratio of 34.78 is 0.78x lower than the industry average, presenting a potential undervaluation of the stock.
Amazon appears to be trading at a premium in comparison to its book value, indicated by a Price to Book ratio of 7.29, which is above the industry average by 1.08x.
The relatively high Price to Sales ratio of 3.67 suggests some level of overvaluation concerning sales performance compared to peers.
The company's Return on Equity (ROE) stands at 5.68%, slightly above the industry average, reflecting effective equity utilization for profit generation.
Amazon's EBITDA reaches $36.6 billion, underscoring a strong cash flow compared to other industry players.
With a gross profit of $86.89 billion, Amazon demonstrates significant profitability in core operations.
The company also exhibits robust revenue growth of 13.33%, surpassing the industry average of 11.18%, indicating solid sales expansion.
Understanding the Debt to Equity Ratio
The debt-to-equity ratio is essential for assessing a company's capital structure and financial risk.
By understanding the debt-to-equity ratio, investors can gauge the financial health and risk profile of a company, leading to better investment decisions.
When comparing Amazon.com to its key four competitors using the Debt-to-Equity ratio, significant observations arise:
Amazon maintains a more robust financial footing than its primary competitors, illustrated by its lower debt-to-equity ratio of 0.4.
This indicates that the company depends less on debt financing, favorably balancing its debt and equity structure.
Conclusion and Key Insights
In summary, Amazon.com showcases a relatively low PE ratio against its competitors, which may hint at an undervaluation. Meanwhile, the elevated PB and PS ratios reflect the market's optimistic valuation of its assets and sales. The company's superior ROE, substantial EBITDA, impressive gross profits, and notable revenue growth signify its robust financial profile compared to others in the retail sector, highlighting strong performance and future potential for growth.
Frequently Asked Questions
What is the main focus of this article?
This article analyzes Amazon.com's performance compared to other companies in the Broadline Retail sector by examining key financial metrics and market trends.
What financial metrics are compared?
The analysis includes P/E ratio, P/B ratio, debt-to-equity ratio, ROE, EBITDA, gross profits, and revenue growth.
How does Amazon.com perform compared to its peers?
Amazon.com generally shows favorable performance, particularly in revenue growth, gross profit, and ROE, indicating solid financial health.
Why is the debt-to-equity ratio significant?
The debt-to-equity ratio helps assess a company's financial leverage and overall risk, influencing investment decisions.
What does a high Price to Earnings ratio indicate?
A high P/E ratio may suggest that a stock is overvalued or that investors expect high future growth.
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