In-Depth Analysis: Amazon.com Versus Competitors In Broadline Retail Industry

In the ever-evolving and competitive landscape of retail, it is crucial for investors and enthusiasts to conduct thorough evaluations of companies before finalizing investment choices. This article presents a detailed comparison between Amazon.com (NASDAQ: AMZN) and its main rivals in the Broadline Retail industry. By assessing key financial performance indicators, market positioning, and future growth opportunities, we aim to furnish insightful information for investors regarding Amazon's standing in the market.

Overview of Amazon.com

Amazon is recognized as the foremost online retailer, serving as a prominent marketplace for third-party vendors. Approximately 75% of its total revenue stems from retail activities, while the remaining segments include Amazon Web Services (AWS) responsible for cloud computing, storage, databases, etc. (15%), advertising services contributing between 5% to 10%, and other sources accounting for the remainder. International sales make up about 25% to 30% of total revenue outside of AWS, with significant contributions from markets such as Germany, the United Kingdom, and Japan.

Comparative Financial Metrics

Company	P/E	P/B	P/S	ROE	EBITDA (in billions)	Gross Profit (in billions)	Revenue Growth
Amazon.com Inc	36.29	7.44	3.37	7.34%	$38.55	$37.37	10.49%
Alibaba Group Holding Ltd	20.36	2.41	2.52	5.01%	$59.0	$117.63	7.61%
PDD Holdings Inc	11.82	4.33	3.44	9.38%	$29.18	$59.65	44.33%
MercadoLibre Inc	54.27	23.83	4.99	15.3%	$0.96	$2.75	37.42%
JD.com Inc	11.86	1.93	0.42	5.22%	$15.92	$45.04	5.12%
Coupang Inc	289.62	10.20	1.40	3.76%	$0.44	$2.49	21.4%
eBay Inc	17.18	6.13	3.31	12.84%	$0.76	$1.86	0.66%
Vipshop Holdings Ltd	8.54	1.58	0.61	6.31%	$1.47	$4.96	60.69%
Average	37.06	5.59	1.63	8.53%	$6.86	$15.16	16.34%

Insights on Amazon.com’s Performance

An in-depth analysis of Amazon reveals several noteworthy trends:

• Amazon's Price to Earnings (P/E) ratio stands at 36.29, which is lower than the industry average by 0.98x, indicating that the stock may be perceived as undervalued and appealing for those focused on growth potential.

• With a Price to Book (P/B) ratio of 7.44, Amazon.com is trading at a higher multiple compared to its peers, suggesting possible overvaluation regarding its book value.

• Amazon's Price to Sales (P/S) ratio of 3.37, which is more than double the industry average, might also indicate overvaluation based on sales figures.

• Its Return on Equity (ROE) of 7.34% is below the industry average by 1.19%, which could suggest an inefficiency in utilizing shareholder equity for profit generation.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for Amazon stands at $38.55 Billion, significantly surpassing the industry average by 5.62x, reflecting robust cash flow and profitability.

• Amazon's gross profit of $37.37 Billion indicates a strong performance in terms of profitability from core operations, approximately 2.47x the industry average.

• However, its revenue growth rate of 10.49% falls short of the industry average of 16.34%, highlighting possible challenges in sales performance.

Understanding Debt to Equity Ratio

The debt-to-equity ratio is a crucial metric that reflects how much debt a company uses to finance its operations relative to its equity. Evaluating Amazon's debt-to-equity ratio against its leading competitors provides insight into its financial health:

• Amazon.com maintains a notably lower debt-to-equity ratio of 0.46 compared to its top four rivals, indicating more conservative financing and a balanced approach with less reliance on debt.

• This lower ratio can be seen positively by investors as it suggests reduced financial risk and a stable capital structure.

Conclusion

In summary, Amazon.com exhibits a combination of a low P/E ratio, a high P/B ratio, and a high P/S ratio compared to its Broadline Retail peers. This indicates that investors may be inclined to pay a premium for the company's growth prospects and ability to generate revenue. When it comes to ROE, EBITDA, gross profit, and revenue growth metrics, Amazon shows a low ROE but high EBITDA and gross profit, paired with lower revenue growth compared to other industry players. This suggests that Amazon may prioritize profitability and operational efficiency over aggressive revenue generation.

Amazon, Retail, Competition