Amazon (AMZN) AI Stock Analysis

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Amazon

(NASDAQ:AMZN)

73Outperform

Amazon's stock is bolstered by strong financial performance and positive earnings call outcomes, highlighting growth in key areas like AWS and advertising. However, technical analysis indicates bearish trends, and a high P/E ratio raises valuation concerns. The company's strategic initiatives and robust financials provide confidence in long-term potential despite current market challenges.

Positive Factors

E-commerce Expansion

Amazon is expanding its Haul program, potentially with launches in Europe and Mexico, indicating growth opportunities in new markets.

Growth Opportunities

Amazon announced its first launch date for the Kuiper 'internet-from-space' satellites, aiming to eventually send over 3k satellites into low-orbit to create a constellation that can provide Internet services globally.

Negative Factors

Macroeconomic Risks

Lowered revenue and operating income estimates due to tariff concerns and softening consumer sentiment.

Tariff Impact

The announcement of reciprocal tariffs has led to a decrease in Amazon's share price.

Amazon (AMZN) vs. S&P 500 (SPY)

Market Cap

$1.81T

Dividend YieldN/A

Average Volume (3M)50.38M

Price to Earnings (P/E)31.0

Beta (1Y)1.24

Revenue Growth10.99%

EPS Growth91.61%

CountryUS

Employees1,556,000

SectorConsumer Cyclical

Sector Strength63

IndustrySpecialty Retail

Share Statistics

EPS (TTM)5.52

Shares Outstanding10,597,729,500

10 Day Avg. Volume56,247,047

30 Day Avg. Volume50,379,674

Financial Highlights & Ratios

PEG Ratio0.34

Price to Book (P/B)N/A

Price to Sales (P/S)3.26

Price to Cash Flow (P/CF)11.40

P/FCF Ratio11.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$268.05

Price Target Upside56.75% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering46

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 demonstrates robust financial performance with strong revenue growth and profitability. The balance sheet reflects solid financial stability, and while cash flow metrics are positive, there is room for improvement in cash generation efficiency.

Income Statement

Very Positive

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.

Balance Sheet

Very Positive

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.

Cash Flow

Very Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
123.81B	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

Technical Analysis Sentiment

Negative

Last Price171.00

Price Trends

50DMA

212.30

Negative

100DMA

215.44

Negative

200DMA

200.22

Negative

Market Momentum

MACD

-5.13

Negative

RSI

38.08

Neutral

STOCH

27.45

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 171 is below the 20-day moving average (MA) of 194.46, below the 50-day MA of 212.30, and below the 200-day MA of 200.22, indicating a bearish trend. The MACD of -5.13 indicates Negative momentum. The RSI at 38.08 is Neutral, neither overbought nor oversold. The STOCH value of 27.45 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 (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BABA	83 Outperform	$303.80B	16.39	11.97%	0.84%	4.28%	28.42%
JD	78 Outperform	$62.81B	9.85	17.55%	2.01%	5.20%	77.60%
PDD	78 Outperform	$144.72B	9.87	45.06%	―	57.51%	82.28%
SE	78 Outperform	$61.24B	142.71	5.93%	―	28.46%	185.04%
MELI	74 Outperform	$93.35B	48.85	51.50%	―	43.56%	91.72%
AMZN	73 Outperform	$1.81T	30.97	24.29%	―	10.99%	91.61%
Sector *	59 Neutral	$11.20B	10.09	-1.41%	3.96%	1.31%	-16.95%

* Consumer Cyclical Sector Average

Performance Comparison

AMZN

Amazon

171.00

-14.19

-7.66%

MELI

Mercadolibre

1,841.29

352.71

23.69%

36.81

10.87

41.90%

BABA

Alibaba

116.54

46.34

66.01%

Sea

106.63

50.65

90.48%

PDD

PDD Holdings

104.21

-13.41

-11.40%

Amazon Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -28.40% | 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.