AMZN  Amazon.com Inc.

Exchange

NASDAQ

Sector

Consumer Services

Industry

Catalog/Specialty Distribution

Market Cap.

449.73B

Vuru Grade

39.36/100

Current Price

$936.19
-3.60 (-0.38%)

Growth Price

$264.01
Overvalued by 71.80%

Stability Price

$83.14
Overvalued by 91.12%

Company Metrics

  • P/E 238.1
  • P/S 3.01
  • P/B 19.43
  • EPS 3.93
  • Cash ROIC 43.43%
  • Cash Ratio 0.59
  • Dividend 0 / 0%
  • Avg. Vol. 3.46M
  • Shares 480.38M
  • Market Cap. 449.73B

Company Description

Amazon.com, Inc. operates as an online retailer in North America and internationally. It operates retail Web sites, including amazon.com and amazon.ca. The company serves consumers through its retail Web sites and focuses on selection, price, and convenience. It also offers programs that enable sellers to sell their products on its Web sites, and their own branded Web sites. In addition, the compa... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

The Rise (And Stall) Of Amazon
Seeking Alpha - 22 hours ago
We assess Amazon's performance against the historical growth experience of Wal-Mart and find significant similarities. Amazon will likely become a major retail presence but reports of its eventual takeover of retail are highly premature.
Why Shopify Stock Could Eventually Live Up to the Hype - Investorplace.com
The Only 3 Cities Amazon.Com, Inc. (AMZN) Should Consider
Investorplace.com - Sep 22, 2017
The New York Times crunched the numbers and found that Denver was the best place for Amazon.com, Inc. (NASDAQ:AMZN) to open its second headquarters.
Amazon: Even More Serious About Video And Content Strategy
Seeking Alpha - Sep 25, 2017
This continues to be a big part of the Amazon thesis for me, maybe more than any other part of the company. I predict the company will use video to push a consumer products strategy.
Amazon Music app gets Alexa controls
Seeking Alpha - 3 hours ago
Amazon's (NASDAQ:AMZN) Alexa goes mobile today after the company integrates its voice assistant into the Amazon Music apps on iOS and Android.
Amazon Hopes Alexa Voice Assistant Will Offer Traction for Music App - Wall Street Journal (subscription)
What Adding Alexa to Its Music App Gives Amazon - 24/7 Wall St.
Revenue Approximations Analysis: Amazon.com, Inc. (AMZN), Automatic Data ...
StockNewsJournal - 3 hours ago
Investors who are keeping close eye on the stock of Amazon.com, Inc. (NASDAQ:AMZN) established that the company was able to keep return on investment at - in the trailing twelve month while Reuters data showed that industry's average stands at 3.98 ...
Better Buy: Amazon.com, Inc. vs Google
Motley Fool - Aug 30, 2017
When it comes to online retail, there's Amazon.com (NASDAQ:AMZN) and then there's everyone else. But when you put the two dominant companies head to head, it may be a tough call on which one makes a better buy for investors.
Amazon.com, Inc. (AMZN) Already Makes Double The Ad Revenues Of Snapchat - StockNews.com (blog)
Amazon Weakens As Threats Rise, EPS Estimates Decline
Seeking Alpha - Sep 25, 2017
Its push into selling groceries and soon perhaps distributing pharmaceuticals is not the stuff of 200X P/Es. Oracle is talking tough against Amazon in its enhanced push into Web-based services; AWS may suffer more pressure on margins than anticipated.
Nike Earnings Preview: A Challenging Wholesale Environment In Q1?
Benzinga - 20 hours ago
Last quarter, it announced a pilot with Amazon. com, Inc. (NASDAQ: AMZN) where the company would test selling a limited assortment of products, as well as a new partnership with Facebook Inc (NASDAQ: FB) Instagram that will allow consumers to ...
Amazon.com Inc (NASDAQ:AMZN) Remains the Best Buy in Tech
Investorplace.com - Sep 19, 2017
If you step back from Amazon.com Inc (NASDAQ:AMZN) and ignore the P/E ratio of AMZN stock and other factors, there's one really amazing aspect of the company.
Appropriate Balance Financial Services Inc. Acquires New Stake in Amazon.com ... - The Ledger Gazette
Barclays PLC Reaffirms “Overweight” Rating for Amazon.com, Inc. (AMZN) - Week Herald
Amazon.Com: Google Does A Stealth Cloud Pricing Cut
Seeking Alpha - Sep 14, 2017
As a result, what's good for AWS is good for Amazon.com, and vice-versa. The one thing that's bad for AWS are price cuts.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for AMZN to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate AMZN's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$936.19 Current Price

$264.01 Growth Price (DCF)

Overvalued by 71.80%


Growth Rate Assumed by Market: 46.38%


Future Free Cash Flow Growth Rate: 13.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$83.14 Stability Price (EPV)

Overvalued by 91.12%


Discount Rate: 15.0%

$689.95 Book Price

Overvalued by 26.30%


Excellent Cash Return on Invested Capital over the past 5 years

AMZN has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

AMZN has created $43.43 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 395.00M 2.03B 1.95B 7.33B 9.71B
divided by
Invested Capital 2.11B 4.73B 9.00B 11.74B 13.61B
Cash ROIC 18.76% 42.92% 21.66% 62.46% 71.34%

Poor Return on Equity over the past 5 years

AMZN has shown an inability to deliver strong results for shareholders. This could be due to poor management, AMZN operating in a highly competitive industry, or having a weak business in general.

AMZN has only generated $3.37 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -39.00M 274.00M -241.00M 596.00M 2.37B
divided by
Stockholders' Equity 8.19B 9.75B 10.74B 13.38B 19.29B
Return on Equity -0.48% 2.81% -2.24% 4.45% 12.29%

Excellent Business Performance over the past 10 years

AMZN has been able to maintain profitability in good times and bad. This could mean AMZN has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

AMZN has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 1.18B 1.36B 2.92B 2.52B 2.09B 395.00M 2.03B 1.95B 7.33B 9.71B

Weak Balance Sheet

AMZN's financial position is not ideal. The key is to check whether AMZN is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 3.11B 3.73B 6.37B 8.76B 9.58B 11.45B 12.45B 17.42B 19.81B 25.98B
Current Assets 5.16B 6.16B 9.80B 13.75B 17.49B 21.30B 24.63B 31.33B 36.47B 45.78B
Total Assets 6.49B 8.31B 13.81B 18.80B 25.28B 32.56B 40.16B 54.51B 65.44B 83.40B
Current Liabilities 3.71B 4.75B 7.36B 10.37B 14.90B 19.00B 22.98B 28.09B 33.90B 43.82B
Total Liabilities 5.29B 5.64B 8.56B 11.93B 17.52B 24.36B 30.41B 43.76B 52.06B 64.12B
Stockholder' Equity 1.20B 2.67B 5.26B 6.86B 7.76B 8.19B 9.75B 10.74B 13.38B 19.29B
Current Ratio 1.39 1.30 1.33 1.33 1.17 1.12 1.07 1.12 1.08 1.04
TL-to-TA 0.82 0.68 0.62 0.63 0.69 0.75 0.76 0.80 0.80 0.77

Consistent Reinvestment of Profits over the past 10 years

AMZN has consistently retained profits. This may put AMZN in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, AMZN can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings -1.38B -730.00M 172.00M 1.32B 1.96B 1.92B 2.19B 1.95B 2.55B 4.92B
Retained Earnings Growth - 46.91% 123.56% 669.77% 47.66% -1.99% 14.30% -11.00% 30.58% 93.16%

Highly Competitive Industry over the past 10 years

It's likely that AMZN is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely AMZN invests heavily in R&D and Sales, General & Administrative expenses.

Only $1.73 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 476.00M 645.00M 902.00M 1.15B 631.00M -39.00M 274.00M -241.00M 596.00M 2.37B
divided by
Revenue 14.84B 19.17B 24.51B 34.20B 48.08B 61.09B 74.45B 88.99B 107.01B 135.99B
Net Profit Margin 3.21% 3.37% 3.68% 3.37% 1.31% -0.06% 0.37% -0.27% 0.56% 1.74%

Growing Pricing Power over the past 10 years

AMZN has growing gross margins, suggesting that they have been able to set higher prices without consideration of the cost of goods sold. Look at its future prospects to determine sustainability and whether the economic moat will continue to strengthen.

$26.18 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 3.35B 4.27B 5.53B 7.64B 10.79B 15.12B 20.27B 26.24B 35.36B 47.72B
divided by
Revenue 14.84B 19.17B 24.51B 34.20B 48.08B 61.09B 74.45B 88.99B 107.01B 135.99B
Gross Margin 22.60% 22.28% 22.57% 22.35% 22.44% 24.75% 27.23% 29.48% 33.04% 35.09%

High Capital Intensity over the past 10 years

AMZN spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

352.88% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 224.00M 333.00M 373.00M 979.00M 1.81B 3.79B 3.44B 4.89B 4.59B 6.74B
divided by
Net Income 476.00M 645.00M 902.00M 1.15B 631.00M -39.00M 274.00M -241.00M 596.00M 2.37B
Capital Expenditure Ratio 47.06% 51.63% 41.35% 84.98% 287.00% -9,705.13% 1,256.93% -2,030.29% 769.97% 284.14%

No Dividend History over the past 10 years

AMZN has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 424.00M 432.00M 442.00M 456.00M 461.00M 453.00M 465.00M 462.00M 477.00M 484.00M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 94.45 50.76 136.49 182.75 173.10 245.18 393.37 310.47 689.07 749.87
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

AMZN has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 424.00M 432.00M 442.00M 456.00M 461.00M 453.00M 465.00M 462.00M 477.00M 484.00M
Stock Bought Back - -1.85% -2.26% -3.07% -1.08% 1.77% -2.58% 0.65% -3.14% -1.45%
Share your thoughts about AMZN

Sign Up or Log In to start contributing!


Discussion
Sort By:
12
Posted by rango55  (on March 20, 2012)
AMZN is in the process of buying Kiva Systems (Boston based startup) for $775 million. Going to revolutionize their warehouses. Here's a video of what they do http://www.youtube.com/watch?feature=player_embedded&v=lWsMdN7HMuA
2
Posted by timholland  (on March 23, 2012)
I love AMZN and Jeff Bezos. Great company. They're building a formidable moat and are going to do what Apple did with the iPod with their Kindle.

BUT, yes there's a but. I'm held back by price. They're even trading above their normal price to book multiple (Book Price). Would love to see it drop down to a more reasonable price. Could definitely convince myself to buy based on it being a GARP stock.
1
Posted by daniele.castelli  (on September 12, 2012)
buy or not to but at this price?
Anyone suggestion?
1
Posted by pbanik  (on September 14, 2012)
@daniele.castelli.
AMZN is trading at over 300 times earnings
http://www.google.ca/finance?q=NASDAQ%3AAMZN&ei=p7RSUOCbFo-3qQGv6wE
The problem for AMZN is their income has shrunk in back to back quarters: http://financials.morningstar.com/income-statement/is.html?t=amzn&region=USA&culture=en-US
It's trading close to its' 52 week high. Don't buy at this price. It's too expensive, unless you believe the stock will climb much higher than what it is trading at. If you bought in the fall of 2008, when the stock was trading at $41.75, then maybe, but it was probably too expensive even at that price. Wait for the stock to drop to more reasonable levels, or consider buying other stocks that are trading at more reasonable price levels.
1
Posted by quantumcanuck  (on March 20, 2012)
setting the discount rate on the growth price at 10%, since amazon is a pretty reliable company, but the market is still assuming a 30% year-on-year growth to hit its current price of $183. i really like them as a company, but can someone please explain why they think this would be a good buy right now?
1
Posted by gsanta111  (on March 29, 2012)
Their probably going on the assumption that the past 5-year EPS growth rate(25.02%)will continue going forward.

Or maybe they're using the past 5-year growth rate in sales (35.03%)

That's all I can think of.