Investors See Amazon as a Value Play
Amazon is beginning to be seen as a value stock, because oil companies are now being considered as growth stocks, taking away the title from technology stocks due to last years technology rout. The dramatic shift is making it difficult for stock managers and investors to adjust, and reposition their portfolios under the new investing “rules”.
Growth-fund managers, who previously invested primarily in tech companies, are now increasingly buying energy stocks that have been traditionally seen as value plays.
As a result of the changes in the economy and the end of low interest rates, and in addition to a more strict monetary policy, has the rotation in stocks changing Amazon into a very attractive valuation play, since the stock sold off dramatically last year.
Amazon Stock Forecast And Analysis
The average analyst target price for Amazon.com Inc, according to forecasts from 41 analysts, is USD 149.42 over the next 12 months. This means that on average, analysts believe the stock will increase by approximately 54% from its current price. Additionally, the average analyst rating for Amazon.com Inc is “Strong Buy,” which indicates a high level of optimism among analysts about the stock’s potential for growth. Stock Target Advisor has its own analysis of Amazon.com Inc which is “Slightly Bullish”, meaning that the analysis shows slightly more positive signals compared to negative signals. Currently, Amazon.com Inc’s stock price is USD 97.25. The stock has changed by -0.89% over the past week, +16.06% over the past month and -31.82% over the last year.
Positive Fundamentals of AMZN Stock
- Positive cash flow: The company has generated positive total cash flow in the most recent four quarters. This indicates that the company is generating enough cash from its operations to cover its expenses and invest in growth.
- Positive free cash flow: The company has also generated positive total free cash flow in the most recent four quarters. This means that the company has enough cash left over after covering its expenses and investing in growth to also pay dividends or buy back shares.
- Superior capital utilization: The company management has delivered a better return on invested capital in the most recent four quarters than its peers, placing it in the top quartile. This suggests that the company is using its capital effectively to generate returns.
- High market capitalization: Amazon is one of the largest companies in its sector and is among the top quartile. Such companies tend to be more stable and less risky.
- Superior Earnings Growth: Amazon has shown top quartile earnings growth in the previous 5 years compared to its sector. This indicates that the company has been growing its earnings at a faster rate than its peers.
- Superior return on equity: The company management has delivered a better return on equity in the most recent four quarters than its peers, placing it in the top quartile. This suggests that the company is generating a high return on the equity invested in the business.
The overall fundamental analysis of Amazon’s stock is “Slightly Bullish” with a score of 6 out of 10, 10 being very bullish.