Amazon Stock Analysis and Forecast:
The stock price forecasts for Amazon.com Inc. from forty different analysts come to an average target price of USD 153.55 for the stock of Amazon.com Inc. over the next twelve months. Strong Buy is the consensus recommendation among Wall Street analysts for Amazon.com, Inc. The stock forecast for Amazon.com, Inc. provided by Stock Target Advisor is Slightly Bullish. This conclusion was reached after considering 7 positive signals and 4 negative signals. The stock price of Amazon.com Inc. was USD 85.82 as of the most recent market close. Over the past week, the price of Amazon.com Inc.’s stock has increased by +3.35%, while over the past month it has decreased by -8.83%, and over the past year it has decreased by -49.64%.
Analyst Coverage:
New Street Research issued a research report on Wednesday January 4th, initiating coverage on Amazon Inc. with a Buy rating and a 12 month price target of $130 per share.
UBS Securities lowered their target forecast to $125 from $165 on the stock.
STA Research also cut the stock target price on the stock to $125 from $150, and maintained the Buy rating.
The catalyst of the target forecast reductions are based on valuation adjustments in response to the current trading range of the stock. UBS Securities is concerned the cloud business in general is slowing down as a result of maturation and not macro issues.
Fundamental Analysis for AMZN Stock:
Positive Fundamentals:
High capitalization
Largest entities in its sector and is among the top quartile. Such companies tend to be more stable.
Great risk adjusted returns
Stock has performed well, compared to peers
Great return on equity
Amazon’s management have gotten better returns than industry peers.
Better capital use
Company has delivered better return on capital than peers.
Good cash flow
Amazon had positive total cash flow in the last four quarters.
Good free cash flow
The company had good free cash flow.
Better Earnings Growth
Amazon is top quartile in sector for earnings growth
Negative Fundamentals:
Overvalued on earnings
Stock valuation is high compared to its peers on a earnings ratio basis
Overvalued on book value
Amazon’s valuation is too high based on its price to book value ratio.
Overvalued on cashflow stream
The stock is overvalued on a cashflow basis, compared to its peers.
Expensive valuation based on free cash flow
Amazon is currently trading at too high a valuation compared to its peers on a price to free cash flow ratio.
Amazon Positive Attributes as a Business:
- Amazon is a very convenient platform for shopping online. It offers a wide variety of products and services, and makes it easy for customers to find what they are looking for.
- Amazon is known for its fast shipping and reliable delivery. Many customers appreciate the convenience of having their orders delivered to their doorstep within a short time frame.
- Amazon has a strong customer service team that is available to assist with any issues or concerns that customers may have.
- Amazon has made it easy for small businesses to sell their products online through its platform. This has helped many small businesses reach a wider audience and grow their customer base.
- Amazon has invested heavily in renewable energy and has committed to transitioning to 100% renewable energy. This helps to reduce its environmental impact and promote sustainability.
About Amazon:
Amazon.com, Inc. is in the business of retailing consumer goods as well as subscriptions both in North America and in other countries around the world. The company can be broken down into three distinct divisions: North America, International, and Amazon Web Services (AWS). Through its brick-and-mortar and digital stores, it sells products and content that it has acquired from other retailers with the intention of reselling them. In addition, the company develops and produces media content as well as manufactures and sells electronic devices such as the Kindle, Fire tablets, Fire TVs, Rings, and Echo, amongst other devices. Additionally, the company offers Kindle Direct Publishing, an online service that enables independent authors and publishers to make their books available in the Kindle Store. In addition, it provides programmes that enable sellers to sell their products on its websites as well as in its stores. It also provides programmes that enable content creators such as authors, musicians, filmmakers, Twitch streamers, app developers, and others to publish and sell their work. In addition, the company offers a variety of services, such as fulfilment, advertising, publishing, and subscriptions to digital content. These services, along with others, include compute, storage, database, analytics, and machine learning. In addition, it provides a membership programme known as Amazon Prime, which enables users to receive free shipping on a variety of products, access to streaming of movies and television shows, and other services. Consumers, merchants, software developers, businesses, and content creators are all clients of the company. Amazon.com, Inc. was established in 1994 and maintains its headquarters in the city of Seattle in the state of Washington.
