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Amazon (AMZN)
NASDAQ:AMZN
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Amazon
(NASDAQ:AMZN)82Outperform
Positive Factors
Revenue Growth
AWS GenAI revenue is projected to grow significantly, reaching $56.3 billion by 2030, contributing to AWS's overall annual growth.
Technology Innovation
AWS announced a new prototype quantum computing chip named Ocelot, which accelerates development of real-world quantum apps with architecture to reduce error corrections up to 90%.
Negative Factors
Capital Expenditure
The increase in AWS capital expenditure, particularly for GenAI infrastructure, represents a significant cost that could impact short-term financials.
Amazon (AMZN) vs. S&P 500 (SPY)
Market Cap
$2.16T
Dividend YieldN/A
Average Volume (3M)40.21M
Price to Earnings (P/E)36.9
Beta (1Y)1.22
Revenue Growth10.99%
EPS Growth91.61%
CountryUS
Employees1,556,000
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)5.52
Shares Outstanding10,597,729,500
10 Day Avg. Volume45,013,058
30 Day Avg. Volume40,205,180
Financial Highlights & Ratios
PEG Ratio0.40
Price to Book (P/B)N/A
Price to Sales (P/S)3.41
Price to Cash Flow (P/CF)11.90
P/FCF Ratio11.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$269.80Price Target Upside32.38% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering47
Amazon Business Overview & Revenue Model
Company DescriptionAmazon (AMZN) is a multinational technology company primarily operating in the e-commerce, cloud computing, digital streaming, and artificial intelligence sectors. Founded in 1994 by Jeff Bezos, Amazon has become one of the world's largest online retailers, offering a vast selection of goods and services ranging from electronics and apparel to groceries and digital content. The company also provides cloud computing services through Amazon Web Services (AWS), a leading platform that powers businesses and government agencies globally.
How the Company Makes MoneyAmazon generates revenue through multiple key streams. Its e-commerce platform is a primary source, earning money from both direct sales of products and fees from third-party sellers using its marketplace. Amazon Prime, a subscription service, offers members benefits like free shipping and access to streaming content, contributing significantly to recurring revenue. AWS is another substantial revenue driver, providing cloud computing and storage solutions to companies worldwide, with a high-margin business model. Additionally, Amazon earns from its advertising services, which allow brands to promote their products on Amazon's websites and apps. Other revenue streams include Amazon's physical stores, such as Whole Foods Market, and various digital services, including Kindle and Audible. Strategic partnerships and acquisitions further bolster its financial performance, enhancing its technology and expanding its market reach.
Amazon Financial Statement Overview
Summary
Amazon's financial performance is strong, marked by robust revenue growth and profitability, efficient operations, and a solid balance sheet. There is room for improvement in cash generation efficiency, but overall, the company is well-positioned for continued success.Income Statement
Amazon's TTM (Trailing-Twelve-Months) revenue reached $637.96 billion, marking a robust growth rate of 11% from the previous year. The gross profit margin stands at 44.46%, while the net profit margin is at 9.29%, both indicating strong profitability. EBIT margin improved to 10.75%, and EBITDA margin is 16.69%, highlighting efficient operations and cost management.92
Very Positive
Balance Sheet
The balance sheet shows a healthy equity ratio of 45.74%, reflecting solid financial stability. The debt-to-equity ratio is 0.46, indicating a manageable level of leverage. Return on equity (ROE) is impressive at 20.71%, showcasing effective use of shareholder funds to generate profits.88
Very Positive
Cash Flow
Operating cash flow to net income ratio is 1.96, suggesting strong cash generation relative to profits. Free cash flow grew by 2.05% over the previous year, indicating steady financial flexibility. The free cash flow to net income ratio is 0.55, which is satisfactory, but shows room for improvement in cash generation efficiency.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 637.96B | 574.78B | 513.98B | 469.82B | 386.06B | Gross Profit |
| 301.71B | 270.05B | 225.15B | 197.48B | 152.76B | EBIT |
| 68.59B | 36.85B | 12.25B | 24.88B | 22.90B | EBITDA |
| 68.59B | 89.40B | 38.35B | 74.39B | 51.01B | Net Income Common Stockholders |
| 59.25B | 30.43B | -2.72B | 33.36B | 21.33B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 101.20B | 86.78B | 70.03B | 96.05B | 84.40B | Total Assets |
| 624.89B | 527.85B | 462.68B | 420.55B | 321.19B | Total Debt |
| 130.90B | 135.61B | 140.12B | 116.39B | 84.39B | Net Debt |
| 52.12B | 62.22B | 86.23B | 80.17B | 42.27B | Total Liabilities |
| 338.92B | 325.98B | 316.63B | 282.30B | 227.79B | Stockholders Equity |
| 285.97B | 201.88B | 146.04B | 138.25B | 93.40B |
| Cash Flow | Free Cash Flow | |||
| 32.88B | 32.22B | -16.89B | -14.73B | 25.92B | Operating Cash Flow |
| 115.88B | 84.95B | 46.75B | 46.33B | 66.06B | Investing Cash Flow |
| -94.34B | -49.83B | -37.60B | -58.15B | -59.61B | Financing Cash Flow |
| -11.81B | -15.88B | 9.72B | 6.29B | -1.10B |
Amazon Technical Analysis
Negative
203.80
Price Trends
225.49
Negative
214.35
Negative
198.76
Positive
Market Momentum
-6.05
Positive
29.26
Positive
21.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMZN, the sentiment is Negative. The current price of 203.8 is below the 20-day moving average (MA) of 223.13, below the 50-day MA of 225.49, and above the 200-day MA of 198.76, indicating a neutral trend. The MACD of -6.05 indicates Positive momentum. The RSI at 29.26 is Positive, neither overbought nor oversold. The STOCH value of 21.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMZN.
Amazon Risk Analysis
Amazon disclosed 24 risk factors in its most recent earnings report. Amazon reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Amazon Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $312.51B | 18.26 | 12.08% | 0.75% | 4.28% | 28.42% | |
82 Outperform | $2.16T | 36.91 | 20.72% | ― | 10.99% | 91.61% | |
79 Outperform | $65.53B | 13.05 | 15.26% | 1.84% | 1.88% | 49.67% | |
77 Outperform | $762.93B | 39.41 | 22.33% | 0.85% | 5.07% | 25.86% | |
77 Outperform | C$190.65B | 68.22 | 17.47% | ― | 27.85% | 1400.97% | |
73 Outperform | $31.07B | 16.91 | 38.29% | 1.65% | 2.79% | -23.30% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
AMZN
Amazon
203.80
29.68
17.05%
EBAY
eBay
66.67
17.53
35.67%
WMT
Walmart
94.97
35.64
60.07%
JD
JD
40.95
20.09
96.31%
BABA
Alibaba
129.85
59.29
84.03%
TSE:SHOP
Shopify
147.24
47.37
47.43%
Amazon Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -14.67% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
Amazon's earnings call highlighted strong revenue and growth in AWS and advertising, with significant advancements in delivery and Prime membership benefits. However, challenges such as foreign exchange headwinds and AWS capacity constraints were noted, though their solutions are in progress.Highlights
Record Revenue and Operating Income
Amazon reported $187.8 billion in revenue for Q4 2024, up 10% year over year, and operating income of $21.2 billion, up 61% year over year.
Growth in Amazon Web Services (AWS)
AWS grew 19% year over year to a $115 billion annualized revenue run rate. This includes strong growth in generative AI and non-generative AI offerings.
Advertising Revenue Increase
Amazon's advertising revenue reached $17.3 billion in Q4, growing 18% year over year, resulting in a $69 billion annual revenue run rate.
Expansion in Speed of Delivery
Amazon expanded same-day delivery sites by more than 60% in 2024, now serving over 140 metro areas, and delivered over 9 billion units the same or next day globally.
Prime Membership Growth
Growth in Prime membership driven by enhanced benefits, including unlimited free shipping and exclusive events. A new benefit of fuel discounts was also introduced.
Lowlights
Foreign Exchange Headwinds
Amazon experienced a $700 million higher than expected foreign exchange headwind, impacting revenue growth, which could have been 11% year over year without it.
AWS Capacity Constraints
AWS growth was moderated by supply constraints, including chip shortages and power limitations, though expected to ease by the second half of 2025.
Impact of Leap Year on Revenue
Revenue guidance for Q1 2025 is impacted by the comping of last year's leap year, contributing approximately $1.5 billion of additional net sales in Q1 2024.
Company Guidance
During the Amazon.com 4th Quarter 2024 financial results call, the company reported $187.8 billion in revenue, marking a 10% year-over-year growth. Amazon faced a $700 million foreign exchange headwind, which, without it, would have resulted in an 11% revenue increase. Operating income reached $21.2 billion, up 61% from the previous year, while trailing twelve-month free cash flow, adjusted for equipment finance leases, was $36.2 billion, a $700 million increase year-over-year. The North America segment grew 10% in revenue, while the international segment expanded by 9%, excluding foreign exchange impacts. Advertising revenue also saw an 18% year-over-year rise, totaling $17.3 billion for the quarter. AWS's annualized revenue run rate reached $115 billion, with a 19% growth year-over-year. Capital investments for the fourth quarter were $26.3 billion, with a similar rate expected for 2025. The company's guidance for Q1 2025 anticipates net sales between $151 billion and $155.5 billion, with a potential $2.1 billion foreign exchange headwind and an additional $1.5 billion impact from the previous year's leap year.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.