Without a doubt, last year was a glorious year for Amazon. After-sales grew 20% y-o-y at the end of 2019, no one can predict how much acceleration the company will achieve in 2020. First, second, and quarterly quarter revenues III both increased. Annual growth is 26%, 40% and 37%, respectively. The Coronavirus-related door locks have led consumers around the world to visit the websites of e-commerce companies to order products without leaving their homes.
After the Amazon stock price surged in the first seven months of this year, the stock has not been able to enjoy significant growth since. Current inventory levels are the same as those on August 1, 2020.
Crucially, however, the increase in these blockades allows Amazon to benefit more from the e-commerce giant’s headlines. Free cash flow for the 12 months ending September 30 was $ 29.5 billion, compared with $ 23.5 billion for the same period last year. Even if this happens, even if it raises operating costs due to Amazon’s strong hiring, and operating costs increase during the pandemic. In the nine months ending September 30, the company’s operating expenses were the US $ 244 billion, up from the US $ 182 billion in the same period last year.
Is NASDAQ: AMZN overvalued or undervalued?
It’s not uncommon for tech companies to be valued at more than ten times their sales. But Amazon is not a real technology company. As I’ve written many times here, Amazon is an infrastructure company. About 80% of a company’s revenue is retail, and its value is often less than its sales.
At first glance, Amazon shares are certainly not cheap. The company’s market cap is $ 1.6 trillion, and the price to earnings ratio is 92 times. However, investors should note the following: Analysts believe that given the company’s strong revenue growth and operating margins, there is still plenty of room for earnings growth per share.
Continuous growth is the key reason for success for Amazon. For example, consider that analysts are currently modelling for Amazon so that it will achieve a per-share return of around $ 63 by 2021, down from around $ 39 in 2020 and around $ 23. la in 2019. With Amazon’s rapid revenue growth and operating margins, profits could skyrocket. In the next few years, the company is expected to grow more.
The cash flow is too much, the cash flow is very little and the stocks are flowing a lot, so it is not surprising that the money flows into these stocks. You can check the AMZN balance sheet at https://www.webull.com/balance-sheet/nasdaq-amzn before investing.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.