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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Amazon.Com, Inc. (XNAS:AMZN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AMZN
Name:
AMAZON.COM, INC. (XNAS:AMZN)
Sector:
- 17741000.00K
Industry:
Internet Retail
CEO:
Mr. Andrew R. Jassy
Total Employees:
1,608,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -126.36% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AMAZON.COM, INC.(AMZN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INTERNET RETAIL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
127.51
One Month Price Target:
$128.46
Six Month Price Target :
$133.23
Likely Price in One Year's Time:
Ticker:
$138.96
Likely Trading Range Today Under (Normal Volatility)
$127.1
Price Upper limit ($) :
$128.13
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$121.4
This week:
$113.86
This month :
$100.2
Other Primary facts
Market Cap:
1299.02B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
10.19B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.54%
-14.05%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$155.82
$142.71
$99.20
$112.31
Medium risk (<10%) entry points
Buy Call
Sell Call
$138.45
Buy Put:
Sell Put:
$135.65
$116.54
$119.37
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AMZN
Sharpe Ratio:
3.13%
Comparison:
AMZN, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 2.04% higher than the industry
& ratio is 37.27% higher than the market/S&P 500 average
Average Returns/Yield of
AMZN
Daily returns:
0.08%
Weekly returns:
0.42%
Monthly returns:
1.66%
Yearly returns:
37.29%
Comparison of returns:
Average annual returns/yield (last 3 years) is -46.54% below industry average
Classification:
AMZN, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.67
Statistical test of Returns:
AMZN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.37%
Weekly Volatility:
5.30%
Monthly Volatility:
10.61%
Yearly Volatility:
36.75%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.99%
Volatility in last five trading days has been -58.11% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.79%
Weekly VaR:
-10.71%
Monthly VaR:
-21.41%
How Much Can the price of
AMZN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-74.18%
This translates to price declining to:
$104.58
This translates to price declining to:
$32.92
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
AMZN is a 51.15% riskier investment compared to the market/S&P 500 & is 29.49% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -49.59% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AMZN
Beta in relation to market/S&P 500--1.34
Expected beta in 1 year's time:
1.236
Expected beta in 3 year's time:
1.748
Unlevered (debt free) Beta:
0.742
Beta in relation to Nasdaq (XNAS):
0.988
Beta in relation to all global stocks::
0.42
Beta Comparison & Analysis
Beta of competitors/peers::
1.41
Beta is -5.27% lower than peers
Average Industry Beta:
2.105
Beta is -36.52% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
27.98%
Sustainable growth rate is -59.02% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.076
Alpha is -61.30% below industry average alpha yield
Alpha is 486% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AMZN
Equity cost of capital:
0.123
Equity cost of capital is -29.97% below industry mean WACC
Unlevered (without debt) cost of capital:
6.83%
Before-tax cost of debt:
1.66%
After-tax cost of debt:
1.31%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.31%
WACC is -11.71% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$46.90
Revenue growth rate per share of (3Y):
9.69
Annual revenue growth rate is 82.33% above the industry average
EPS:
$2.07
Expected Annual growth rate of EPS (3Y):
40.29%
Expected future EPS growth rate is -1159.61% lower than the Internet Retail industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$11.12
EBITDA per share
$5.92
Valuation Analysis Today of
AMZN
P/E Ratio:
114.66
P/E Ratio of Competitors/Peers:
56.21
P/E ratio is 104.01% higher than main peers & is 587.69% higher than the industry
Stock price/value with industry average P/E ratio: $34.52
AMZN is 269.43% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.72
Price to sales ratio is 32.78% above the industry mean
P/B (Price to book value ratio):
9.69
-
-
Net income growth rate (3Y):
222.61%
Net income growth rate is 227.45% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
84.54%
Net debt to equity ratio:
57.38%
Debt to assets ratio:
27.58%
Net debt to assets ratio:
18.72%
Debt-to-asset ratio is -57.95% below industry average
Ability to repay debt:
Interest coverage ratio:
32.03
Interest coverage ratio is 206.84% more than industry average
Looking forward:
Debt growth rate:
37.93%
Annual debt growth is 29% higher than industry average debt growth rate
Debt repayment rate in last quarter: 7.43%
Analysis of Key Statistics
Correlation of price movement with the market:
0.636
Statistical significance of correlation:
AMZN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.441
Stock price is 44.17% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.441
Correlation of price movement with Nasdaq (^IXIC):
-0.046
Covariance of price movement with the market:
-0.063
Kurtosis
4.269
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.024
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
AMZN
Gross Profit Margin Ratio:
79%
Operating Profit Margin Ratio:
4.12%
Operating profit margin is -48.30% lower than the industry
Net Profit Margin Ratio:
79%
Effective Tax Rate:
5.36%
Effective tax rate is -40.79% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
15.98%
Return on equity (ROE) is -18.86% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.21%
Return on assets (ROA) is 76.88% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
0.96
Current ratio is -51.82% below industry average
Cash Conversion Cycle (days):
-46.1
Cash conversion cycle is -170.55% below industry average
The remaining useful life of property plant & equipment is: 0.9 years
Stock based compensation to net income ratio:
15.18%
In-depth Efficiency Analysis
Revenue generated per employee:
297.1K
Each employee generates -61% less revenue than industry average revenue per employee
EBITDA generated per employee:
37.5K
Each employee generates -80% less EBITDA than industry average revenue per employee
Profit generated per employee:
13.3K
Each employee generates -92% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 11.0K
Each employee generates -802% less free cash flow than industry average revenue per employee
Assets/Capital per employee
172.2K
Each employee generates -802% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 31.15%
Growth rate in R&D investment/expenditure is -252.00% lower than the industry
Competitors/Peer firms of
AMZN
TESLA, INC. (XNAS:TSLA)
STARBUCKS CORPORATION (XNAS:SBUX)
JD.COM, INC. (XNAS:JD)
RIVIAN AUTOMOTIVE, INC. (XNAS:RIVN)
PINDUODUO INC. (XNAS:PDD)
Mercado Libre, Inc. (XNAS:MELI)
MARRIOTT INTERNATIONAL, INC. (XNAS:MAR)
O'Reilly Automotive, Inc. (XNAS:ORLY)
LULULEMON ATHLETICA INC. (XNAS:LULU)
Current Analyst Ratings
Strong buy�63%
Buy�117%
Hold�13%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
477.75B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
385.45B
92.30B
28.25B
9.43B
44.09B
34.66B
273.00M
72.62B
226.00M
1.88B
35.77B
60.27B
19.68B
21.41B
22.62B
1.21B
21.41B
Statement of Cash Flow
Date:
Period:
8.98B
Differed Income Tax :
- 2001000.00K
Stock Based Compensation :
3.25B
Change in Working Capital :
- 18077000.00K
Accounts Receivables:
- 1516000.00K
Other Working Capital:
1.34B
Other Non-Cash Items:
8.90B
Net Cash Provided by Operating Activities:
- 2790000.00K
Investments in PP&E:
- 14951000.00K
Net Acquisitions:
- 6341000.00K
Purchases of Investments:
- 1764000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
36.39B
29.99B
66.39B
32.50B
34.99B
-
133.88B
224.63B
20.23B
-
-
-
32.03B
276.89B
-
410.77B
68.55B
-
-
12.82B
58.14B
139.51B
113.29B
23.97B
137.26B
-
276.77B
5.00M
82.07B
- 2365000.0K
54.29B
March 31, 2022 at 6:00:00 AM
458.07B
134.00B
410.77B
-
113.29B
76.9B
22.75B
1.21B
906.00M
- 9087000.00K
-
- 2666000.00K
-
13.74B
1.99B
16.00M
122.00M
36.60B
36.48B
- 2790000.00K
- 14951000.00K
- 17741000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
AMZN
2023
2024
2025
2026
2027
$139.65
$242.71
$264.51
$288.26
$314.14