Amazon, or Amazon.com, is the world's largest and leading portal for eCommerce. It was founded by Jeff Bezos, incorporated in 1994, and later went public in 1997. The company is headquartered in Seattle, Washington, and is a member of the influential FAANG group of stocks. When it comes to stocks, Amazon is proof that small companies can do big things; the AMZN stock price was pennies when it was first listed and now it trades well over $100 (split adjusted) per share.
The company is not a true retailer nor a pure-play manufacturer but in the business of connecting consumers and merchants together. The website was first created as a means of selling books at a discount but it has since grown to include most verticals in the retail sector. A few of the products the company does manufacture are the Kindle and Fire Tablets, Fire TVs, and smart home devices like Echo. Echo is powered by an AI personality named Alexa which can take vocal commands from its users.
Today, Amazon operates in three segments including North America, International, and Amazon Web Services. The first two segments are the core retail business while Amazon Web Services includes a host of Internet-related services for consumers and businesses alike. A little-known fact is that Amazon Web Services is as important to the function of the Internet as Google because of the infrastructure it provides and it hosts so many business websites.
Services provided by Amazon for merchants include listing, fulfillment, and advertising as well as subscriptions. Services provided by Amazon Web Services include cloud computing, storage, database maintenance, analytics, machine learning, and even artificial intelligence. In regard to the company's operations, Amazon Web Services is the smaller of the three segments but is a fast-growing and well-established part of the business that has had a positive influence on the AMZN stock price.
Among the many ancillary services provided by Amazon is Kindle Direct Publishing. This is a cloud-based service that enables writers and publishers to publish their works directly in the Kindle Store. Kindle, if you are unaware, is an Internet-connected tablet designed for reading books but also streams other forms of entertainment. Amazon also develops and publishes its own media content that is available via Kindle or the Amazon App that can be found on most smart TVs.
Amazon is also a disruptor, moving into new digital markets whenever it thinks it can make a profit. The move into streaming is only one example, another is a push into healthcare. Amazon Prime is another disruptive move and is a subscription service that entitles members exclusive access to Amazon services.
Amazon's stock price can be affected by factors including the pace of revenue growth, profitability, growth in the AWS segment, and any stock splits that may occur. The Amazon share price was impacted by splits 4 times between the IPO in 1997 and June 2022 and additional splits should be anticipated. The forecast for Amazon stock, splits aside, is for steadily increasing price action punctuated by pullbacks, corrections, and consolidations. While there is competition for Amazon, this company is entrenched and will stand the test of time because eCommerce is the way businesses thrive in today's markets.
Wall Street Analyst Weigh In
AMZN has been the subject of several research analyst reports. Morgan Stanley lowered their price objective on shares of Amazon.com from $210.00 to $190.00 in a research note on Friday, April 29th. Credit Suisse Group lowered their price objective on shares of Amazon.com from $185.00 to $170.00 and set an "outperform" rating for the company in a research note on Tuesday, July 26th. BMO Capital Markets lowered their price objective on shares of Amazon.com from $182.50 to $172.50 in a research note on Friday, April 29th. Rosenblatt Securities boosted their price target on shares of Amazon.com to $118.00 and gave the company a "neutral" rating in a research note on Friday, July 29th. Finally, Wolfe Research raised their price objective on shares of Amazon.com from $140.00 to $170.00 and gave the company an "outperform" rating in a research note on Friday, July 29th. Two research analysts have rated the stock with a sell rating, two have given a hold rating and thirty-seven have assigned a buy rating to the company's stock. According to data from MarketBeat, Amazon.com presently has an average rating of "Moderate Buy" and a consensus target price of $177.99.
Amazon.com Trading Up 0.1 %
Shares of AMZN Stock opened at $142.30 on Friday. The company has a 50 day moving average of $120.82 and a 200-day moving average of $134.27. The company has a quick ratio of 0.68, a current ratio of 0.95 and a debt-to-equity ratio of 0.44. Amazon.com has a 12-month low of $101.26 and a 12-month high of $188.11. The firm has a market cap of $1.45 trillion, a P/E ratio of 127.57, a PEG ratio of 6.59 and a beta of 1.33.
Amazon.com (NASDAQ:AMZN - Get Rating) last issued its quarterly earnings results on Thursday, July 28th. The e-commerce giant reported ($0.20) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.15 by ($0.35). Amazon.com had a return on equity of 15.79% and a net margin of 2.39%. The company had revenue of $121.23 billion for the quarter, compared to analysts' expectations of $119.16 billion. During the same quarter in the previous year, the business earned $0.76 EPS. The company's revenue for the quarter was up 7.2% on a year-over-year basis. Sell-side analysts anticipate that Amazon.com will post 0.97 earnings per share for the current year.
Insider Buying and Selling
In related news, VP Shelley Reynolds sold 173 shares of the firm's stock in a transaction that occurred on Monday, May 23rd. The shares were sold at an average price of $2,169.22, for a total value of $375,275.06. Following the completion of the transaction, the vice president now directly owns 5,989 shares of the company's stock, valued at approximately $12,991,458.58. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. In other news, CEO Andrew R. Jassy sold 23,620 shares of the firm's stock in a transaction on Monday, August 15th. The shares were sold at an average price of $142.29, for a total transaction of $3,360,889.80. Following the sale, the chief executive officer now owns 1,892,000 shares in the company, valued at approximately $269,212,680. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, VP Shelley Reynolds sold 173 shares of the firm's stock in a transaction that occurred on Monday, May 23rd. The stock was sold at an average price of $2,169.22, for a total value of $375,275.06. Following the transaction, the vice president now owns 5,989 shares in the company, valued at $12,991,458.58. The disclosure for this sale can be found here. In the last ninety days, insiders sold 37,722 shares of company stock valued at $12,737,509. Company insiders own 12.70% of the company's stock.
