Amazon vs. Peers: Key Metrics Highlight Valuation and Profitability Gaps

In today’s fast-paced and fiercely competitive business environment, investors and industry analysts require comprehensive company assessments. This article delivers a full industry comparison, evaluating Amazon against its key competitors in the broadline retail sector. By examining critical financial metrics, market positioning, and growth prospects, we aim to provide valuable insights for investors and reveal Amazon’s standing within the industry.

Amazon Background

Amazon is a leading online retailer and third-party seller marketplace. Retail-related revenue accounts for approximately 74% of total revenue, followed by Amazon Web Services (AWS) and advertising services. The international segment contributes around 22% of total revenue, led by Germany, the UK, and Japan.

Company | P/E Ratio | P/B Ratio | P/S Ratio | ROE | EBITDA | Gross Profit | Revenue Growth
---|---|---|---|---|---|---|---
Amazon.com Inc | 20.62 | 5.01 | 3.59 | 12.61% | $102.16B | $104.83B | 19.62%
MercadoLibre Inc | 52.52 | 12.49 | 2.78 | 6.17% | $0.96B | $4.16B | 49.76%
eBay Inc | 21.49 | 9.76 | 3.92 | 12.12% | $0.83B | $2.3B | 14.8%
Dillard's Inc | 14.45 | 4.64 | 1.49 | 4.71% | $0.27B | $0.72B | -3.66%
Global E Online Ltd | 44.86 | 7.34 | 6.37 | 5.26% | $0.05B | $0.13B | 39.15%
Macy's Inc | 9.30 | 1.22 | 0.27 | 1.3% | $0.33B | $2.03B | 2.07%
Ollie's Bargain Outlet Holdings Inc | 17.69 | 2.29 | 1.61 | 2.99% | $0.09B | $0.28B | 14.25%
Kohl's Corp | 7.79 | 0.49 | 0.14 | 3.69% | $0.22B | $1.36B | 10.99%
Savers Value Village Inc | 70.20 | 3.63 | 0.97 | 4.95% | $0.07B | $0.25B | 7.43%
Hour Loop Inc | 46.75 | 7.41 | 0.43 | 12.6% | $0.0B | $0.02B | 25.24%
Average | 31.67 | 5.47 | 2.0 | 5.98% | $0.31B | $1.25B | 17.78%

After a deep dive into Amazon, the following trends emerge:

Amazon’s P/E ratio stands at 20.62, which is 0.65 times lower than the industry average, suggesting the stock may be undervalued.

Its P/B ratio of 5.01 is significantly below the industry average by 0.92 times, indicating a potentially undervalued valuation and untapped growth potential.

Amazon’s P/S ratio is relatively high at 3.59, which is 1.79 times the industry average, suggesting the stock may be overvalued based on revenue performance.

The company posts a strong ROE of 12.61%, which is 6.63 percentage points above the industry average. This demonstrates efficient use of equity to generate profits and showcases robust profitability and growth capabilities.

Amazon’s EBITDA stands at $102.16 billion, which is 329.55 times the industry average, underscoring its superior profitability and solid cash flow generation.

Compared to the industry, Amazon’s gross profit reaches $104.83 billion, which is 83.86 times the industry average, highlighting the strength of its core business profitability and higher margins.

Amazon’s revenue growth rate is 19.62%, surpassing the industry average of 17.78%, indicating strong sales expansion and increasing market share.

Debt-to-Equity Ratio

The debt-to-equity ratio reflects the proportion of debt used to finance a company’s assets and operations relative to equity.

When considering the debt-to-equity ratio in industry comparisons, it provides a concise assessment of a company’s financial health and risk profile, aiding informed decision-making.

By comparing Amazon with its top 4 peers in terms of debt-to-equity ratio, the following observations can be made:

Amazon’s financial position is stronger than that of its top 4 industry peers.

With a lower debt-to-equity ratio of 0.4, the company relies less on debt financing and maintains a healthier balance between debt and equity, which may be viewed positively by investors.

Key Takeaways

For Amazon in the broadline retail industry, its P/E and P/B ratios are lower than those of its peers, suggesting the stock may be undervalued. However, a higher P/S ratio implies a revenue-based valuation premium. In terms of profitability, Amazon demonstrates higher ROE, EBITDA, and gross profit, outperforming industry peers. Additionally, a strong revenue growth rate further highlights Amazon’s dominant position in the market.

This article was generated by an automated content engine and reviewed by editors.