Amazon Stock Is A Buy

Amazon.com, Inc. (AMZN ) engages in the retail sale of consumer products and subscriptions in North America and internationally. It operates through North America, International, and Amazon Web Services (AWS) segments. The company sells merchandise and content purchased for resale from vendors, as well as those offered by third-party sellers through retail Websites. It also manufactures and sells electronic devices, including Kindle e-readers, fire tablets, fire TVs, and echo; and provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store.

We've spent a lot of time on retail and the retail "recovery" over the past few months, so for today's article, it makes sense to take a look at the retail juggernaut, Amazon.com.

Amazon has proven to be a truly disruptive force within the sector. The aptly-named giant has a tendency to eliminate all competitors in its path. Some it buys out--Whole Foods--others it just washes out to the "sea"--Sears, JCPenney, etc.

No CEO seems safe from this company. Grocery-store CEOs received quite a shock when Whole Foods was scooped up and now it seems like health-care CEOs may be suffering sleepless nights thanks to the company's plan to enter the health care field with the likes of Warren Buffett and JPMorganChase.

Amazon also possesses a sort of "kryptonite" whereby the company typically avoids the negative press and reputation for shutting down Main St. "Mom and Pop" retail stores like rival Wal-Mart. Even the most "woke" consumers seem unable to avoid patronizing Jeff Bezos and his creation.

Cities across the US have thrown themselves at the feet of Bezos, offering free land, tax rebates, and just about every possible incentive to attract attention and convince the company to build its second HQ in their locales.

And, people seem quite happy to allow the company's data-gathering and surveillance technology --"Alexa"--a prized place in their homes despite all the unavoidable similarities to Orwell's "1984" telescreen.

When the firm last reported results, the numbers were excellent. Back in February Amazon announced Q4 results which featured an excellent holiday shopping season with a 38% sales increase, a 69% leap in operating income, and a huge 60% jump in advertising revenue. They sold "tens of millions" of those Big-Brotheresque Alexa-powered devices. The firm will report results again on or about April, 26th.

The huge company sports a huge share price to match, and while our models often have trouble valuing companies that break the mold--because their fundamentals (ie "profits") may not always show up in a manner which can be properly quantified and evaluated.

We continue our BUY recommendation on Amazon.com for 2018-03-13. Based on the information we have gathered and our resulting research, we feel that Amazon.com has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE Company Size and Momentum.

 

ValuEngine Forecast

 

Target
Price*

Expected
Return

1-Month

1,595.01 0.43%

3-Month

1,617.73 1.86%

6-Month

1,688.52 6.32%

1-Year

1,670.17 5.16%

2-Year

1,830.72 15.27%

3-Year

1,817.14 14.42%

 

Valuation & Rankings

Valuation

75.49% overvalued

Valuation Rank

4

1-M Forecast Return

0.43%

1-M Forecast Return Rank

81

12-M Return

85.84%

Momentum Rank

95

Sharpe Ratio

1.30

Sharpe Ratio Rank

95

5-Y Avg Annual Return

34.88%

5-Y Avg Annual Rtn Rank

96

Volatility

26.92%

Volatility Rank

57

Expected EPS Growth

122.29%

EPS Growth Rank

89

Market Cap (billions)

735.34

Size Rank

100

Trailing P/E Ratio

363.70

Trailing P/E Rank

30

Forward P/E Ratio

163.62

Forward P/E Ratio Rank

2

PEG Ratio

2.97

PEG Ratio Rank

10

Price/Sales

4.13

Price/Sales Rank

27

Market/Book

51.21

Market/Book Rank

4

Beta

1.53

Beta Rank

18

Alpha

0.35

Alpha Rank

91

Disclosure: None.

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.