Amazon.com, Inc. (NASDAQ:AMZN) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of AMZN, it is a financially-robust company with an impressive track record and a excellent future outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Amazon.com here.
High growth potential with proven track record
Investors in search for stocks with room to flourish should look no further than AMZN, with its expected earnings growth of 31% which is expected to flow into an impressive return on equity of 28% over the next couple of years. In the past couple of years, AMZN has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, AMZN also outperformed its industry, which delivered a growth of 19%. This is what investors like to see!
AMZN’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. AMZN appears to have made good use of debt, producing operating cash levels of 0.56x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For Amazon.com, there are three pertinent aspects you should further research:
- Valuation: What is AMZN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether AMZN is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does AMZN return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from AMZN as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AMZN? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.