View | Modify | Create | Collaborate
Amazon retail business has picked up as consumers prefer online contactless purchases to going to the store due to the Covid-19 pandemic. The company also recruited nearly 175,000 in their fulfillment and delivery network in response to increased customer demand. The company also has increased costs due to the pandemic as they make changes in processes and invest in equipment to make sure the employees stay healthy.
Amazon's (NASDAQ:AMZN) Net sales for Q3 2020 increased 37% to $96.1 billion, compared with $40 billion in the same period of the previous year. Excluding the $691 million favorable impact from y-o-y changes in foreign exchange rates throughout the quarter, net sales increased 36% compared to the same period of the previous year. Operating income increased to $6.2 billion, compared with operating income of $3.2 billion in the same period of the previous year. Net income increased to $6.3 billion, or $12.37 per diluted share, compared with net income of $2.1 billion, or $4.23 per diluted share, in the same period of the previous year.
Below are key drivers of Amazon's value that present opportunities for upside or downside to the current Trefis price estimate for Amazon:
For additional details, select a driver above or select a division from the interactive Trefis split for Amazon at the top of the page.
Amazon is an online retailer which sells electronics, books, retail consumer goods, music, games, apparel and other merchandise to consumers in the U.S., Canada, the United Kingdom, Germany, Brazil, France, China, Japan, India Mexico, Netherlands, Italy and other countries. The company also provides web services such as cloud computing and online storage to web sites and web developers.
Amazon Web Services business is the most valuable segment for Amazon due to the company's high growth within this segment. In recent years, consolidated AWS revenues have grown at high double digits. Despite the lowest revenue contribution, AWS is the most valuable segment due to high margins of cloud computing as compared to e-commerce retail business which operates on razor thin margins.
The growth in Amazon's Web Services has become a critical factor driving the company's expansion globally. Several companies continued to adopt these services in recent years. Besides helping big businesses, the company’s cost efficient web services are also useful for young start-ups that may have cash restrictions.
The growth in the AWS segment has been massive - the annual growth in AWS revenues came in at 70% in 2015, 55% in 2016, 43% in 2017, 46% in 2018 and 37% in 2019. Apart from this, the company also showed strong profitability in the cloud-services business as margins have improved in this segment in successive years.
Amazon is making significant investments to expand its presence in regions such as China, India, Italy and Spain. While these investments will enhance revenue growth, however, this strategy could also raise margin pressure. Amazon will invest a couple of billion dollars on its Indian operations, but since the country’s e-commerce market is highly competitive, we believe it will be difficult for Amazon to attain profitability in the region for at least a couple of years.
[Updated 01/11/2021] Amazon Update Having grown by 72% since the end of 2019, Amazon's stock (NASDAQ:AMZN) still has growth potential in the near term. ...More
Amazon's (NASDAQ:AMZN) stock climbed more than 11% in the last 5 trading days, adding nearly $170 billion to its market cap. To put things in perspective, the increase in Amazon's market cap in a single week was more than the magnitude of market cap of most of the firms in the S&P 500 index. Needless to say, there is always a doubt whether Amazon can sustain its incredible run. ...More
Stock splits are back in favor this year, with Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) splitting their shares late last month. Although splits don’t change the fundamentals of a company, they often cause a run-up in the stock price post-announcement as investors see them as a signal that growth could remain strong ... ...More
Best Buy's stock (NYSE: BBY) has grown by a strong 113% (as of September 10) since the coronavirus low on March 23, pushing its market value close to $28 billion. ...More
Large-cap stock splits are back with Apple and Tesla slated to split their shares on August 31. Although splits don't change the fundamentals of a company, they often cause a run-up in the stock price post announcement. ...More
After a near-70% rise since the market bottom on March 23 this year, we believe Amazon's stock (NASDAQ:AMZN) doesn't have any room to grow at its all-time high current price of around $3,200 per share. ...More
Microsoft's stock (NASDAQ:MSFT) has doubled since the beginning of 2018. Great news for Microsoft investors. Things haven't been too shabby for Amazon (NASDAQ:AMZN) investors either, as the company's stock also gained almost 60% during the same period... ...More
The Coronavirus pandemic is making people rely increasingly on the Internet to work, learn, shop, and entertain themselves as they spend more time at home. ...More
After an almost 25% rise in Amazon's (NASDAQ:AMZN) stock since the beginning of 2020, at the current price of around $2,400 per share, we believe Amazon’s stock offers limited upside potential once the market shakes off the impact of the coronavirus outbreak. Despite disruptions in its supply chains globally, Amazon has benefited over recent weeks as millions of people in the U.S. ...More
Amazon (NASDAQ:AMZN) stock took a big hit, falling by about 11.8% since March 8, (through March 12), as the broader S&P 500 fell by over 16.5%. The stock is down by a total of over 16.5% since early February. There were two broad trends driving the sell-off. ...More
Amazon (NASDAQ:AMZN) saw its stock price rise by almost 165% over the last three years, from $825 in February 2017 to about $2155 in February 2020. This rise was primarily driven by a significant jump in Revenues as well as Net Income Margin. The company’s stock gains were partly offset by a lower price-to-earnings (P/E) multiple and an increase in shares outstanding. ...More
Yes, as per Trefis Price estimate Amazon's (NASDAQ:AMZN) stock has a fair value of $2,218, which is roughly 10% higher than the current market price. Amazon is one of the world's largest online retailers and dabbles in a broad range of businesses, including its core e-commerce operations, cloud services, digital advertising, groceries, and prescription drugs. ...More
Amazon (NASDAQ:AMZN) is slated to release its Q4 and full-year 2019 results on January 30, 2020. We believe that Amazon's Revenues and earnings will beat consensus. We expect Amazon to report revenues of $279.3 billion (vs. consensus estimate of $279.1 billion), which would be 19.9% higher than the previous year. Earnings are likely to be around $22.67 (vs. ...More
While Amazon's (NASDAQ:AMZN) market cap has been hovering under the $1 trillion mark in recent months, the stock has seen significant volatility on account of mixed quarterly results. ...More
Amazon's (NASDAQ:AMZN) North America business, consisting primarily of retail sales in the region, is expected to contribute $177.6 billion to Amazon's 2019 revenues, making up 61.2% of Amazon's $290.4 billion in expected revenues for 2019. The North America segment contribution is more than twice that from International business. ...More
Amazon (NASDAQ:AMZN) makes money through its consumer ventures (online and offline retail sales, search advertising, content streaming etc) and cloud services (rental of compute, storage etc) and competes with industry leaders in the retail as well as technology industry including Walmart, Facebook, Google, Microsoft, IBM, eBay and Oracle. ...More
For the last 15 quarters, Amazon's retail revenue growth has averaged 26.3% versus eBay's 6.5% (on a year-on-year basis). However, the last four quarters have seen significant weakness with Amazon's retail revenue growth averaging 17.8% versus eBay's 2.6%. ...More
Per Trefis analysis, a merger of Amazon (NASDAQ:AMZN) and Oracle (NYSE:ORCL) could unlock significant value. While the idea may sound very ambitious, in order to keep itself at the top of the cloud technology food-chain, Oracle may be the best acquisition Amazon could ever make. ...More
Ride-hailing major Uber (NYSE:UBER) indicated that it wants to be the "Amazon of transportation," targeting a wide range of transportation services. In this analysis, we take a look at how Uber's financials and losses compared with Amazon's in its early years. ...More
Shopify - an e-commerce platform that allows businesses to create and run online stores - has seen its stock soar by close to 10x since its 2015 IPO. The company has two revenue streams - namely Subscriptions (which gives users access to its e-commerce platform and tools) and Merchant Services (wh... ...More