Enthusiasm for Amazon.com Inc (AMZN) amongst analysts has seen a notable uptick in recent times, fuelled by the company’s formidable position in e-commerce and strategic move into new markets. The juggernaut continues to solidify its dominance in the online shopping arena while its cloud computing segment, Amazon Web Services (AWS), shows no signs of slowing down growth.
How Is Amazon Faring in its Fundamental Analysis?
In assessing the stock rating of AMZN, Stock Target Advisor adopts a ‘Hold’ stance. The target price set by us is $217.29, suggesting a projected price increase of around 18.25% in the next 12 months. This is primarily rooted in our analysis of the company’s financial health and market position.
Amazon’s robust financial standing is reinforced by its impressive one year total returns – capital gains of 41.39% and dividend returns standing at 0 – leading to a total return of 41.39% over the trailing 12 months.
Further, Amazon’s performance from a growth perspective over the last 5 years has been exceptional. Revenue growth has increased by an impressive 146.81%, while earnings exhibited an even stronger growth of 202.05%.
Assessing the company’s profitability ratios paints an equally favorable picture. The Return on Assets (RoA) was recorded at 5.95%, Return on Equity (RoE) at 20.31%, and Return on Invested Capital (RoIC) at 12.56%. These figures, combined with a relatively manageable debt equity ratio of 28.89%, highlight the company’s capability to leverage its assets and equity to generate profit.
Stock Target Advisor’s Analysis on Amazon:
AMZN is covered by a comprehensive analyst base of 41, with an average rating of ‘Strong Buy’. On a sector level too, the overall sentiment within the Internet Retail sector on the NSD Exchange leans towards a ‘Strong Buy’. However, Stock Target Advisor maintains a slightly bearish rating, a reflection perhaps of our meticulous evaluation and slightly cautious outlook.
Notably, other prominent players in this sector include PDD, MELI, JD, and EBAY. Despite rigorous competition, Amazon retains its stature as the largest stock in this sector, a testimony to its continued resilience and growth potential.
Conclusion:
Whether you are a current investor or contemplating buying into Amazon’s growth story, the data underscores the value pick that Amazon remains in the current market environment. Despite some short-term market volatilities that may arise, Amazon’s future growth potential cannot be underestimated, making it a worthwhile consideration for any long-term investment portfolio.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
