AMZN  Amazon.com Inc.

Exchange

NASDAQ

Sector

Consumer Services

Industry

Catalog/Specialty Distribution

Market Cap.

442.15B

Vuru Grade

39.36/100

Current Price

$924.99
+6.61 (+0.72%)

Growth Price

$265.32
Overvalued by 71.32%

Stability Price

$83.55
Overvalued by 90.97%

Company Metrics

  • P/E 174.2
  • P/S 3.08
  • P/B 20.25
  • EPS 4.9
  • Cash ROIC 43.43%
  • Cash Ratio 0.59
  • Dividend 0 / 0%
  • Avg. Vol. 3.38M
  • Shares 478.01M
  • Market Cap. 442.15B

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

How Amazon.com, Inc. Crushed Its Own Q1 Targets
Motley Fool - Apr 28, 2017
On Thursday evening, Amazon.com (NASDAQ:AMZN) reported results for the first quarter of fiscal year 2017. The report was welcomed with a 4% share price boost in after-hours trading, as the company breezed by management's guidance targets for the ...
Making Sense Of Amazon's One Downgrade - Seeking Alpha
Shepherd Financial Partners LLC Invests $1.923 Million in Amazon.com, Inc. (AMZN) - The Cerbat Gem
Amazon.com, Inc. Stock Downgraded By 1 Firm As Most Others Boost PT
ValueWalk - Apr 29, 2017
Amazon stock soared to a new high on Friday after smashing earnings estimates Thursday night, but it's starting to look like the party's already over.
Amazon.com, Inc. Stock Skyrockets After Smashing Earnings Estimates
ValueWalk - Apr 27, 2017
Amazon released its latest earnings report after closing bell tonight, posting GAAP earnings of $1.48 per share per share on $35.7 billion in revenue.
Amazon Prime Subs Closing In On Costco Membership Numbers - Seeking Alpha
Jeff Bezos Is Just $5 Billion Away From Being the World's Richest Person - Bloomberg
Amazon Q1: Still Unprofitable
Seeking Alpha - Apr 28, 2017
On his list was Amazon.com (NASDAQ:AMZN). Jack mentioned Amazon's lack of profitability and high cash-burn as the main reasons that this company will merely last 10 months.
Is Amazon Basically 'Dumping?'
Seeking Alpha - Apr 28, 2017
Dumping is a term used in international trade that depicts the unfair practice by a company or country of selling its products in a foreign market at a lower price than it sells at home, or a lower price than it actually costs to produce the product ...
How Amazon.com Inc. Makes Most of Its Money
Motley Fool - Apr 9, 2017
Alexa, cloud computing, delivery drones, and more: For all its headline-grabbing innovations, the business model for Amazon.com (NASDAQ:AMZN) can seem dizzyingly complex. The reality is much different though. Amazon's core business model is actually ...
Amazon.com, Inc. (AMZN) Is Breaking the First Rule of Strategy - Smarter Analyst
Amazon.com, Inc. (AMZN) Stock: $1 Trillion Doesn't Matter - Investorplace.com
Not sure what to wear? Amazon's algorithms may help
Reuters - Apr 26, 2017
Amazon.com Inc wants to help you choose what to wear. The technology and retailing behemoth on Wednesday unveiled a voice-controlled camera, the Echo Look, and an app that recommends which of two outfits is best, using fashion specialists' advice ...
Not sure what to wear? Amazon.com can help - Nasdaq
Amazon.com Unveils Echo Look, A Fashion Advisor For Your Closet - StockNews.com (blog)
Amazon.com, Inc. (AMZN) Wants to Dress You With Echo Look
Investorplace.com - Apr 27, 2017
You can count on Amazon.com, Inc. (NASDAQ:AMZN) to come up with … interesting … ideas. Like drone-delivered packages, Dash buttons for pushbutton ordering of products and the idea it came up with in 2015 to stuff its Alexa digital assistant in a ...
Amazon.com, Inc. (AMZN) Creates a Compelling New Opportunity for Ambarella Inc ... - Smаrt Stоck Nеws
Amazon Posts Bigger-Than-Expected Increase in Profit - Wall Street Journal (subscription)
Amazon: Threatened By Kroger?
Seeking Alpha - Apr 25, 2017
Psuedonymous Seeking Alpha contributor DoctoRx warned recently that Amazon faces threats from Kroger, Wal-Mart, and Costco as it experiments with bricks and mortar retail.
Amazon.com, Inc. Stock PT Set To High Of $1250 In Time For Earnings
ValueWalk - Apr 24, 2017
Amazon stock ticked higher Monday morning after the company received a massive price target increase that's well over the $1,000 a share mark.
Two Words That Keep Amazon.com, Inc. (AMZN) Stock on Top - Investorplace.com
Will Q1 Earnings Hold a Surprise for Amazon.com, Inc. (AMZN)? Top Analyst Answers - Smarter Analyst
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.

$924.99 Current Price

$265.32 Growth Price (DCF)

Overvalued by 71.32%


Growth Rate Assumed by Market: 45.96%


Future Free Cash Flow Growth Rate: 13.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$83.55 Stability Price (EPV)

Overvalued by 90.97%


Discount Rate: 15.0%

$689.06 Book Price

Overvalued by 25.51%


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%
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Discussion
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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.