Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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Highlights from the ratings report include:
- AMZN's revenue growth has slightly outpaced the industry average of 24.0%. Since the same quarter one year prior, revenues rose by 29.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $594.00 million or 40.42% when compared to the same quarter last year. Despite an increase in cash flow, AMAZON.COM INC's cash flow growth rate is still lower than the industry average growth rate of 53.34%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 96.3% when compared to the same quarter one year ago, falling from $190.00 million to $7.00 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Internet & Catalog Retail industry and the overall market, AMAZON.COM INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
Amazon.com, Inc. operates as an online retailer in North America and internationally. It operates retail Websites, such as amazon.com and amazon.ca. The company serves consumers through its retail Websites and focuses on selection, price, and convenience. The company has a P/E ratio of 307.9, below the average retail industry P/E ratio of 311.7 and above the S&P 500 P/E ratio of 17.7. Amazon.com has a market cap of $114.13 billion and is part of the
industry. Shares are up 45.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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