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TheStreet Open House
Amazon.com Inc
AMZN : NASDAQ : Services
$306.21 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 3,565,100
10/20/14 - 4:00 PM ET

Financial Analysis


AMAZON.COM INC's gross profit margin for the second quarter of its fiscal year 2014 has increased when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line.

During the same period, stockholders' equity ("net worth") has increased by 21.40% from the same quarter last year.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)19340.015704.0
EBITDA ($mil)1123.0869.0
EBIT ($mil)14.0112.0
Net Income ($mil)-126.0-7.0


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)7986.07463.0
Total Assets ($mil)37898.029623.0
Total Debt ($mil)3119.03042.0
Equity ($mil)10602.08733.0


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin36.4633.44
EBITDA Margin5.85.53
Operating Margin0.070.71
Sales Turnover2.162.26
Return on Assets0.47-0.34
Return on Equity1.7-1.15
Debt Q2 FY14 Q2 FY13
Current Ratio1.01.11
Debt/Capital0.230.26
Interest Expense45.033.0
Interest Coverage0.313.39


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)462.0457.0
Div / share0.00.0
EPS-0.27-0.02
Book value / share22.9519.11
Institutional Own % n/a n/a
Avg Daily Volume3535662.04192135.0

Valuation


HOLD. AMAZON.COM INC's P/E ratio indicates a significant premium compared to an average of 414.47 for the Internet & Catalog Retail industry and a significant premium compared to the S&P 500 average of 18.06. For additional comparison, its price-to-book ratio of 13.20 indicates a significant premium versus the S&P 500 average of 2.49 and a significant premium versus the industry average of 10.47. The price-to-sales ratio is similar to the S&P 500 average, but it is significantly below the industry average, indicating a discount. After reviewing these and other key valuation criteria, AMAZON.COM INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AMZN 797.00 Peers 414.47   AMZN 26.01 Peers 40.05

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

AMZN is trading at a significant premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AMZN is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AMZN 152.96 Peers 52.76   AMZN NM Peers 0.89

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

AMZN's ratio is negative making this valuation measure meaningless.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AMZN's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AMZN 13.20 Peers 10.47   AMZN 265.21 Peers 160.27

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AMZN is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

AMZN is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AMZN 1.71 Peers 3.57   AMZN 22.30 Peers 29.33

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AMZN is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

AMZN trails its peers on the basis of sales growth

 

 

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