Amazon.com Inc. (NASDAQ:AMZN) has emerged as the most valuable retailer in the U.S.
Amazon exceeds rivals in terms of value
Amazon is not the largest retailer in the U.S. when considering revenue compared to the likes of Walmart Stores Inc. (NYSE:WMT) Target Corporation (NYSE:TGT) and Costco Wholesale Corporation (NASDAQ:COST) combined. In the last two years, Amazon’s stock value almost tripled to an astronomical $922 swelling the company’s cap rate to $439.8 billion. This surpasses by far the combined valuations of its rivals including Costco, Target, Walmart, Kohl’s Corporation (NYSE:KSS) and Macy’s Inc (NYSE:M).
The market cap rate of Amazon is almost double that of its main rival Walmart, yet Walmart ranks as the largest retailer in the U.S. It reported revenue of $482B in the fiscal year 2016 against Amazon’s revenue of $136B.
The combined total of the five Amazon rivals adds up to $337 billion compared to Amazon’s $436 billion hence exceeding them all by around $100 billion. Macy’s and Kohl’s are valued at $8.9 billion and $6.6 billion respectively.
Reasons for success
The difference in values can be traced to the recent success with Amazon’s investors as well as rivals’ market regression. Amazon’s stock is up nearly 200% since the start of 2015. Target and Walmart are down about 30% and 15% respectively.
Macy’s experienced several problems which led to a drop by almost half. Kohl’s share price is down by a third. Costco is the only retailer with positive returns in the period with a rise of 18%.
Amazon is more than just an online retailer and this contributed to the company overtaking the common brick and mortar. Its popularity in the tech industry includes products like Amazon Fire and Alexa as well as active cloud business. It also has other businesses including grocery delivery. All these services make Amazon a diverse entity.
Other factors
Amazon CEO, Jeff Bezos, is viewed as an outstanding leader hence the affairs of the company being a point of interest for many in the market. The outstanding stock run has also played a great role in placing Bezos ahead of Warren Buffet hence making him the second richest man in the world.