Amazon.com Inc (AMZN, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its solid financial performance and promising growth trajectory. With its shares currently trading at $177.85, Amazon.com Inc has experienced a modest daily increase of 0.15%, despite a slight dip of -3.07% over the past three months. A detailed evaluation using the GF Score indicates that Amazon.com Inc is poised for significant future growth.
What Is the GF Score?
The GF Score is a proprietary ranking system developed by GuruFocus, assessing stocks based on five key valuation aspects. This system, which has been rigorously backtested from 2006 to 2021, suggests that stocks with higher GF Scores typically yield superior long-term returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential for outperformance. For Amazon.com Inc, the components of the GF Score are as follows:
- Financial strength rank: 8/10
- Profitability rank: 8/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 9/10
With an impressive GF Score of 93 out of 100, Amazon.com Inc demonstrates a strong potential for market outperformance.
Understanding Amazon.com Inc's Business
Amazon.com Inc, with a market cap of $1.87 trillion and annual sales of $604.33 billion, is a dominant force in online retail. The company's operations are diversified across e-commerce, Amazon Web Services (AWS), advertising services, and more. Retail-related revenue accounts for roughly 75% of its total, with AWS contributing around 15%, and advertising services between 5% to 10%. Amazon's international operations, particularly in Germany, the United Kingdom, and Japan, make up 25% to 30% of its non-AWS sales.
Financial Strength Breakdown
Amazon.com Inc's financial robustness is evident through its Financial Strength rating. The company boasts an Interest Coverage ratio of 19.76, significantly above the benchmark of 5 set by investing legend Benjamin Graham. Additionally, its Altman Z-Score of 5.32 indicates a strong buffer against financial distress, and a Debt-to-Revenue ratio of 0.22 highlights effective debt management.
Profitability and Growth Metrics
Amazon.com Inc's Profitability Rank is impressive, with significant improvements in its Operating Margin and Gross Margin over the past five years. The company's Growth Rank is also notable, with a 3-Year Revenue Growth Rate of 13.1%, outperforming 67.94% of its industry peers. This is complemented by a strong increase in EBITDA, highlighting Amazon.com Inc's capacity for sustained growth.
Conclusion
Considering Amazon.com Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score underscores the company's exceptional position for potential market outperformance. For investors seeking similar opportunities, the GF Score Screen offers a valuable tool for identifying companies with strong investment potential.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
