Amazoncom Inc (NASDAQ:AMZN) led the NasdaqGS gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Amazon.com’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for Amazon.com
Is Amazon.com still cheap?According to my valuation model, the stock is currently overvalued by about 97.85%, trading at US$1,661 compared to my intrinsic value of $839.27. This means that the opportunity to buy Amazon.com at a good price has disappeared! But, is there another opportunity to buy low in the future? Since Amazon.com’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Amazon.com?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Amazon.com’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in AMZN’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe AMZN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on AMZN for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for AMZN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Amazon.com. You can find everything you need to know about Amazon.com in the latest infographic research report. If you are no longer interested in Amazon.com, you can use our free platform to see my list of over 50 other stocks with a high growth potential.