Stock Analysis
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- NasdaqGS:AMZN
At US$105, Is It Time To Put Amazon.com, Inc. (NASDAQ:AMZN) On Your Watch List?
Today we're going to take a look at the well-established Amazon.com, Inc. (NASDAQ:AMZN). The company's stock saw a decent share price growth in the teens level on the NASDAQGS over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Amazon.com’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Amazon.com
What Is Amazon.com Worth?
Good news, investors! Amazon.com is still a bargain right now. According to my valuation, the intrinsic value for the stock is $157.21, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Amazon.com’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Amazon.com?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for Amazon.com. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since AMZN is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on AMZN for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AMZN. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
If you'd like to know more about Amazon.com as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 2 warning signs for Amazon.com and we think they deserve your attention.
If you are no longer interested in Amazon.com, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
What are the risks and opportunities for Amazon.com?
Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions through online and physical stores in North America and internationally.
Rewards
Trading at 8.6% below our estimate of its fair value
Earnings are forecast to grow 35.6% per year
Risks
Profit margins (0.8%) are lower than last year (4.5%)
Large one-off items impacting financial results
Further research on
Amazon.com
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
About NasdaqGS:AMZN
Amazon.com
Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions through online and physical stores in North America and internationally.
Reasonable growth potential with adequate balance sheet.
