Amazon.com Inc (AMZN, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its solid financial standing and promising growth trajectory. With its shares currently valued at $181.39, Amazon.com Inc has experienced a daily increase of 1.4%, despite a slight dip of -0.97% 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 from 2006 to 2021. Stocks with higher GF Scores typically yield better returns. The GF Score ranges from 0 to 100, with 100 indicating the highest potential for outperformance. Amazon.com Inc boasts a GF Score of 93, reflecting its strong potential for market outperformance.
- Financial strength rank: 8/10
- Profitability rank: 8/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 10/10
Understanding Amazon.com Inc's Business
Amazon.com Inc, with a market cap of $1.9 trillion and annual sales of $604.33 billion, is a dominant force in online retail and cloud computing. Approximately 75% of its revenue comes from retail operations, followed by 15% from Amazon Web Services. The company also earns 5% to 10% from advertising services, with the remainder from various other sources. Amazon's international operations, led by Germany, the UK, and Japan, account for 25% to 30% of its non-AWS sales.
Financial Strength Breakdown
Amazon.com Inc's financial resilience is evident in its Financial Strength rating. The company's Interest Coverage ratio stands at an impressive 19.76, significantly above the benchmark set by investing legend Benjamin Graham. Additionally, its Altman Z-Score of 5.35 indicates strong protection against financial distress, and a Debt-to-Revenue ratio of 0.22 showcases prudent debt management.
Profitability and Growth Metrics
Amazon.com Inc's Profitability Rank is enhanced by its increasing Operating Margin, which has grown to 6.41% in 2023 from 5.18% in 2019. The company's Gross Margin also improved to 16.32% in 2023, reflecting its enhanced efficiency in converting sales into profits. The Piotroski F-Score and a Predictability Rank of 4.0 stars further affirm its stable financial health.
Conclusion
Considering Amazon.com Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's exceptional position for potential market outperformance. Investors looking for similar opportunities can explore more companies with strong GF Scores using the GF Score Screen.
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.
