Is Amazon Stock a Buy or Sell?

Business Overview 📖

Amazon, founded in 1994 by Jeff Bezos, focuses on e-commerce with its own fulfillment network, cloud computing platform, and streaming services like Prime Video, Audible, and Twitch.

Management Highlight Quotes 📢

Latest News

  • Amazon had the biggest Prime Day 2022 with over 300M items sold.
  • Amazon announced free Grubhub+ membership for US Prime members.

Growth 🌱

  • Quarterly Revenue 116.44 Billion, Up 7% YoY
  • Trailing 12 Months Revenue 477.75B, Up 14% YoY
  • Next Quarter: Sales are expected to be between $116.0 billion and $121.0 billion, up between 3% and 7% compared. This guidance anticipates an unfavorable impact of approximately 200 basis points from foreign exchange rates. ☹️

Profitability 💰

  • Gross Margin 43%
  • Operating Margin 3%
  • Net Margin -3% ☹️
  • Next Quarter: Operating income (loss) is expected to be between $(1.0) billion and $3.0 billion, compared with $7.7 billion in the second quarter of 2021. ☹️

Valuation ⚖️

  • Market Cap 1.13 Trillion
  • P / S: 2
  • P / E: 53 ☹️

Bull Say 👍

  • AWS is the Cloud Computing industry leader with a 30%+ growth rate and impressive margin.

Bear Say 👎

  • Amazon’s profitability continues deteriorating due to economic headwinds as the latest quarter's net margin is negative.
  • Amazon’s valuation is too high for a company with 7% revenue growth. The current P/E ratio is 53 (vs Apple’s 24).
  • Amazon’s growth rate in the future continues to slow. The average growth rate is only 5% next quarter.

Bottomline 💡

By analyzing all the data, facts, and opinions, our model is bearish about Amazon.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store