Amazon (AMZN) AI Stock Analysis

• Market Cap: $2.21T
• Dividend Yield: N/A
• Average Volume (3M): 59.43M
• Price to Earnings (P/E): 34.5
• Beta (1Y): 1.29
• Revenue Growth: 10.08%
• EPS Growth: 71.88%
• Country: US
• Employees: 1,560,000
• Sector: Consumer Cyclical
• Sector Strength: 67
• Industry: Specialty Retail
• EPS (TTM): 1.59
• Shares Outstanding: 10,616,353,000
• 10 Day Avg. Volume: 50,345,951
• 30 Day Avg. Volume: 59,432,527
• PEG Ratio: 2.83
• Price to Book (P/B): 6.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 98.49
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 7.17
• Enterprise Value/Ebitda: 4.59
• 1Y Price Target: $240.37
• Price Target Upside: 13.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 48

Amazon's overall stock score reflects a strong financial performance and positive earnings call outcomes, with growth in key areas such as AWS and advertising. However, technical analysis indicates potential overbought conditions, and a high P/E ratio raises valuation concerns. Despite these challenges, Amazon's strategic initiatives and robust financials provide confidence in its long-term potential.

Positive Factors

AWS Growth

The primary revenue driver was AWS (+17% YoY), with its operating margin rising due to server capacity optimization, helping lower infrastructure cost.

Retail and Advertising

More advertisers are turning to AMZN’s retail media network to bypass Apple’s privacy changes and get closer to shoppers, explaining the dramatic growth in ad sales.

Robots and Automation

Amazon announced eight new robots at its Delivering the Future event, which can sort packages more efficiently and assist with handling.

Negative Factors

Project Kuiper Expenses

There is a reduction in revenue and operating profit forecasts for 2025 to 2027 due to additional expenses related to Project Kuiper.

Soft Guidance

Soft guidance for 2Q25e with expected revenue and operating income growth missing consensus and analyst estimates, attributed to seasonal costs and additional launch expenses.

Tariff Pressures

Amazon faces pressures from tariff uncertainties as more than 70% of its products are sourced from China, making it vulnerable to rising tariffs and potential cost increases.

Amazon Business Overview & Revenue Model

Company Description

Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). Its products offered through its stores include merchandise and content purchased for resale; and products offered by third-party sellers The company also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Rings, Blink, eero, and Echo; and develops and produces media content. In addition, it offers programs that enable sellers to sell their products in its stores; and programs that allow authors, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. Further, the company provides compute, storage, database, analytics, machine learning, and other services, as well as fulfillment, advertising, and digital content subscriptions. Additionally, it offers Amazon Prime, a membership program. The company serves consumers, sellers, developers, enterprises, content creators, and advertisers. Amazon.com, Inc. was incorporated in 1994 and is headquartered in Seattle, Washington.

How the Company Makes Money

Amazon generates revenue through multiple key streams. Its e-commerce platform is a primary source, earning money from both direct sales of products and fees from third-party sellers using its marketplace. Amazon Prime, a subscription service, offers members benefits like free shipping and access to streaming content, contributing significantly to recurring revenue. AWS is another substantial revenue driver, providing cloud computing and storage solutions to companies worldwide, with a high-margin business model. Additionally, Amazon earns from its advertising services, which allow brands to promote their products on Amazon's websites and apps. Other revenue streams include Amazon's physical stores, such as Whole Foods Market, and various digital services, including Kindle and Audible. Strategic partnerships and acquisitions further bolster its financial performance, enhancing its technology and expanding its market reach.

Amazon Financial Statement Overview

Summary

Amazon demonstrates solid financial performance with strong profitability, efficient operations, and a stable balance sheet. Revenue growth and profitability metrics are robust, supporting an optimistic outlook. The balance sheet is well-managed, though reducing debt could enhance financial flexibility. Cash flow remains strong, though the decline in free cash flow should be monitored. Overall, Amazon's financial health is commendable, reflecting its position as a leading player in the specialty retail sector.

Income Statement

Amazon's income statement reveals strong profitability and growth. The TTM (Trailing-Twelve-Months) gross profit margin stands at 45.37%, indicating solid cost management. The net profit margin is a robust 10.14%, showcasing effective conversion of revenues into profit. Revenue growth is consistent, with a 2% increase from the previous year, reflecting steady expansion. EBIT and EBITDA margins are healthy at 11.02% and 17.98% respectively, underscoring operational efficiency.

Balance Sheet

Amazon's balance sheet is strong, with a debt-to-equity ratio of 0.44, indicating prudent leverage. The return on equity (ROE) is a solid 21.56%, highlighting effective use of shareholder funds. The equity ratio is 47.54%, reflecting a stable capital structure with significant equity financing. Overall, the company maintains a healthy balance between debt and equity, although there is room for improvement in reducing total debt.

Cash Flow

The cash flow statement shows robust operating cash flow to net income ratio of 1.73, indicating strong cash generation capabilities. However, the free cash flow has decreased by 36.67% compared to the previous year, which could be a concern. The free cash flow to net income ratio is 0.32, suggesting moderate cash conversion efficiency. Overall, while operating cash flow remains strong, the decline in free cash flow warrants attention.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
650.31B	637.96B	574.78B	513.98B	469.82B	386.06B
	Gross Profit
295.09B	311.67B	270.05B	225.15B	197.48B	152.76B
	EBIT
71.69B	68.59B	36.85B	12.25B	24.88B	22.90B
	EBITDA
116.91B	123.81B	89.40B	38.35B	74.39B	51.01B
	Net Income Common Stockholders
65.94B	59.25B	30.43B	-2.72B	33.36B	21.33B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
94.56B	101.20B	86.78B	70.03B	96.05B	84.40B
	Total Assets
643.26B	624.89B	527.85B	462.68B	420.55B	321.19B
	Total Debt
133.25B	130.90B	135.61B	140.12B	116.39B	84.39B
	Net Debt
67.04B	52.12B	62.22B	86.23B	80.17B	42.27B
	Total Liabilities
337.39B	338.92B	325.98B	316.63B	282.30B	227.79B
	Stockholders Equity
305.87B	285.97B	201.88B	146.04B	138.25B	93.40B
Cash Flow		Free Cash Flow
20.81B	32.88B	32.22B	-16.89B	-14.73B	25.92B
	Operating Cash Flow
113.90B	115.88B	84.95B	46.75B	46.33B	66.06B
	Investing Cash Flow
-106.28B	-94.34B	-49.83B	-37.60B	-58.15B	-59.61B
	Financing Cash Flow
-10.60B	-11.81B	-15.88B	9.72B	6.29B	-1.10B

Amazon Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 211.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMZN, the sentiment is Positive. The current price of 211.37 is above the 20-day moving average (MA) of 186.40, above the 50-day MA of 190.29, and above the 200-day MA of 199.44, indicating a bullish trend. The MACD of 3.47 indicates Negative momentum. The RSI at 67.98 is Neutral, neither overbought nor oversold. The STOCH value of 89.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AMZN.

Amazon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BABA	81 Outperform	$320.93B	18.64	11.97%	0.74%	4.28%	28.42%
MELI	80 Outperform	$126.98B	61.87	49.11%	―	41.92%	81.11%
JD	79 Outperform	$51.42B	9.65	19.81%	2.63%	5.20%	77.60%
PDD	78 Outperform	$162.02B	11.31	45.06%	―	57.51%	82.28%
SE	77 Outperform	$83.92B	206.55	5.93%	―	28.46%	185.04%
AMZN	73 Outperform	$2.21T	34.47	25.24%	―	10.08%	71.88%
Sector *	61 Neutral	$6.93B	11.84	2.89%	3.91%	2.59%	-21.68%

Amazon Corporate Events

Amazon’s Recent Regulation FD Disclosure Event

In 2024, Amazon experienced strong financial growth, with total revenue increasing by 11% year-over-year to $638 billion, and operating income improving by 86% to $68.6 billion. The company expanded its product offerings and services, including advancements in AI and infrastructure through AWS, and continued to enhance customer experiences across its platforms. Amazon’s commitment to innovation and customer satisfaction is reflected in its ‘Why Culture,’ which emphasizes curiosity and problem-solving to drive success.

Spark’s Take on AMZN Stock

According to Spark, TipRanks’ AI Analyst, AMZN is a Outperform.

Amazon’s stock is bolstered by strong financial performance and positive earnings call outcomes, highlighting growth in key areas like AWS and advertising. However, technical analysis indicates bearish trends, and a high P/E ratio raises valuation concerns. The company’s strategic initiatives and robust financials provide confidence in long-term potential despite current market challenges.

To see Spark’s full report on AMZN stock, click here.