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 topic of a number of research reports. Itau BBA Securities initiated coverage on Amazon.com in a research note on Tuesday, July 26th. They issued an "outperform" rating and a $146.00 price objective on the stock. Mizuho cut their target price on Amazon.com from $197.50 to $155.00 and set a "buy" rating on the stock in a research report on Thursday, July 21st. They noted that the move was a valuation call. Benchmark cut their target price on Amazon.com from $200.00 to $185.00 in a research report on Friday, April 29th. StockNews.com raised Amazon.com from a "sell" rating to a "hold" rating in a research report on Monday, August 1st. Finally, Loop Capital cut their target price on Amazon.com from $187.50 to $141.25 and set a "buy" rating on the stock in a research report on Friday, May 27th. Two equities 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. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $177.99.
Amazon.com Stock Performance
NASDAQ:AMZN opened at $142.10 on Thursday. The company has a market cap of $1.45 trillion, a PE ratio of 127.39, a price-to-earnings-growth ratio of 6.52 and a beta of 1.33. The stock's 50 day simple moving average is $120.30 and its 200-day simple moving average is $134.32. Amazon.com has a 1-year low of $101.26 and a 1-year high of $188.11. The company has a debt-to-equity ratio of 0.44, a current ratio of 0.95 and a quick ratio of 0.68.
Amazon.com (NASDAQ:AMZN - Get Rating) last released its earnings results on Thursday, July 28th. The e-commerce giant reported ($0.20) earnings per share for the quarter, missing the consensus estimate of $0.15 by ($0.35). The firm had revenue of $121.23 billion during the quarter, compared to analysts' expectations of $119.16 billion. Amazon.com had a net margin of 2.39% and a return on equity of 15.79%. The business's revenue was up 7.2% compared to the same quarter last year. During the same quarter last year, the business earned $0.76 EPS. As a group, equities research analysts anticipate that Amazon.com will post 0.97 EPS for the current fiscal year.
Insider Activity
In related news, CFO Brian T. Olsavsky sold 761 shares of the 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 $1,650,776.42. Following the completion of the sale, the chief financial officer now owns 2,375 shares of the company's stock, valued at $5,151,897.50. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. In related news, VP Shelley Reynolds sold 173 shares of the 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 completion of the sale, the vice president now owns 5,989 shares of the company's stock, valued at $12,991,458.58. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, CFO Brian T. Olsavsky sold 761 shares of the 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 $1,650,776.42. Following the completion of the sale, the chief financial officer now directly owns 2,375 shares of the company's stock, valued at approximately $5,151,897.50. The disclosure for this sale can be found here. Insiders have sold a total of 37,722 shares of company stock worth $12,737,509 over the last quarter. 12.70% of the stock is currently owned by corporate insiders.
