Amazon.com Inc (AMZN, Financial) has recently captured the attention of investors and financial analysts alike, thanks to its strong financial performance and promising growth prospects. With its shares currently priced at $179.6 and experiencing a daily gain of 3.62%, despite a slight three-month dip of -1.02%, Amazon.com Inc stands out in the market. A detailed analysis, supported by 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 backtested from 2006 to 2021, correlates closely with long-term stock performance. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential for outperformance. For Amazon.com Inc, the GF Score is an impressive 94 out of 100, indicating a strong potential for market outperformance.
- Financial strength rank: 8/10
- Profitability rank: 8/10
- Growth rank: 10/10
- GF Value rank: 6/10
- Momentum rank: 8/10
Understanding Amazon.com Inc's Business
Amazon.com Inc, with a market cap of $1.89 trillion and annual sales of $604.33 billion, is the leading online retailer globally. Its business is primarily divided into retail (75% of total revenue), Amazon Web Services (AWS) (15%), advertising services (5% to 10%), and other smaller segments. International sales, led by Germany, the UK, and Japan, make up 25% to 30% of Amazon's non-AWS revenue. This diverse income stream positions Amazon.com Inc uniquely in the tech and retail landscapes.
Financial Strength and Profitability
Amazon.com Inc's financial robustness is evident in its Interest Coverage ratio of 19.76, significantly above the benchmark set by investing legend Benjamin Graham. Additionally, its Altman Z-Score of 5.24 indicates a strong buffer against financial distress, and a Debt-to-Revenue ratio of 0.22 showcases prudent debt management.
Profitability is another of Amazon.com Inc's strengths, with an increasing Operating Margin over the past five years, reaching 6.41% in 2023. The company's Gross Margin also improved to 16.32% in 2023, reflecting enhanced efficiency in revenue conversion into profit.
Growth Trajectory
Amazon.com Inc's commitment to growth is underscored by its Growth rank of 10/10. The company's 3-Year Revenue Growth Rate of 13.1% outperforms 68.05% of its peers in the Retail - Cyclical industry. Moreover, its EBITDA has consistently grown, with a three-year growth rate of 19.4%.
Conclusion
Considering Amazon.com Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score highlights the company's unparalleled position for potential outperformance. For investors looking for similar opportunities, the GF Score Screen offers a valuable tool for identifying high-potential stocks.
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.
