A Quick Glance At Amazon’s Valuation
Analysis of Amazon’s price and book value figures
Amazon (AMZN) is trading at a price-to-book value of 22.1x. The stock’s price-to-sales ratio is 3.4x, while its price-to-estimated sales ratio is 2.9x.
The company has an EV (enterprise value) of $464.4 billion, which implies that the company has a current EV-to-trailing-12-month-sales ratio of 3.3x. Its EV-to-estimated sales ratio for 2017 is 2.3x.
Where do Amazon’s earnings stand?
Amazon’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin for 2016 was 9%, which yielded EBITDA of $12.8 billion—a 35% fall from the prior year. For 2017, Wall Street is expecting EBITDA of $18.8 billion from the company. Its EV-to-adjusted EBITDA ratio for 2017 is expected to be 24.7x. Amazon shares are trading at a price-to-EBITDA ratio of 37.2x.
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Earnings and sales
Amazon’s EPS (earnings per share) for last year came on total sales of $142.6 billion, which grew 26% from the year prior. Sales are expected to expand to ~$200.7 billion in 2017.
Inside Amazon’s cash flow metrics
Amazon has cash on hand of $21.5 billion. The stock is trading at a price-to-cash flow ratio and a price-to-free-cash-flow ratio of 28.5x and 50.9x, respectively. The company’s trailing-12-month EV-to-cash-flow ratio is 27.6x, while its trailing-12-month EV-to-free-cash-flow ratio is 49.5x.
Amazon’s credit rating
Moody’s rating on Amazon’s debt is “WR,” meaning “withdrawn rating.” The company also has an S&P debt rating of “AA-” and a stable debt outlook.