Amazon Stock Analysis, Valuation (NASDAQ:AMZN)

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$1915.01 $29.29 (1.51%) AMZN stock closing price Sep 21, 2018 (Closing)

Investors can watch the Amigobulls Amazon stock analysis video here. Our analyst opinion covering the buy and sell arguments for AMZN stock is shown in the video.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock., Inc. Stock Rating 2.7/5

Amigobulls AMZN stock analysis uses latest quarter 2018 Q2 financial data like Amazon revenue growth, profit margins and cash flows. We also use relative valuation metrics like PE ratio and price to sales ratio for Amazon valuation analysis. Based on a company's historical fundamentals we arrive at Amazon stock rating which is indicative of the company's financial performance.

Should you buy AMZN stock?

  • The Year Over Year (YoY) revenue growth for Amazon was 39.3% in 2018-06.
  • Long term revenue growth has been strong with a 5 year compounded annual growth of 25.5.
  • The company has an operating cash flow which is 2.9396 times the net income.
  • Amazon's return on invested capital of 15.6 is good.
  • The LTM ROE of 22.1 for Amazon is attractive.
  • The company has a healthy free cash flow margin of 8.5.

Should you sell AMZN stock?

  • Amazon posted a TTM Net margin of 3%.
  • With a debt/equity ratio of 0.7, Amazon is highly leveraged in comparison to Retail-Wholesale peers.
  • The AMZN stock currently trades at a PE of 185.1, which is expensive, compared to the sector average of 20.8.
  • The company is trading at a price to sales multiple of 4.8, which is higher in comparison to the Retail-Wholesale sector average of 0.8, making AMZN stock expensive.

Comments on this video and Amazon stock

Amigobulls Amazon stock analysis helps investors in understanding how the company's fundamentals have performed in the last few quarters. Fundamental analysis of a company is the most often used approach to find the intrinsic value of a stock.

While doing a study of the company financials, Amazon revenue growth and profit or net income are two main metrics which help in identifying whether AMZN stock is overvalued or undervalued. One can also combine technical analysis and fundamental analysis to get a holistic picture about AMZN stock.