A Closer Look at Amazon’s Valuations



Shareholder returns and stock trends

Amazon (AMZN) generated investor returns of 13.4% in the trailing-one-month period and 58.1% in the trailing-12-month period. The company’s stock price rose 1.2% in the trailing-five-day period.

Amazon’s peers Alphabet (GOOG), Facebook (FB), Twitter (TWTR), and eBay (EBAY) generated investor returns in the trailing-12-month period of 39.4%, 54.7%, 4.8%, and 26.3%, respectively.

Moving averages

On November 14, 2017, Amazon closed the trading day at $1,136.84. Based on this figure, here’s how the stock fared in terms of its moving averages:

  • 13.7% above its 100-day moving average of $1,000.00
  • 12.2% above its 50-day moving average of $1,013.00
  • 6.4% above its 20-day moving average of $1,002.00

Relative strength index

For the last 14 days, Amazon’s relative strength index (or RSI) was 88 compared to 76, 69, 67, and 33 recorded by Alphabet, Facebook, Twitter, and eBay, respectively, within the same period.

Amazon’s credit rating

Moody’s rating on Amazon’s debt is WR. The company also has an S&P debt rating and debt outlook of AA- and “stable,” respectively.

Amazon’s cash flow numbers in focus

Amazon has $24.3 billion of cash in hand. Amazon stock is trading at a price-to-cash-flow ratio of 32.7x and a price-to-free-cash-flow ratio of ~71.0x.

For the last one-year period, its EV-to-cash-flow ratio was 32.7x, and its EV-to-free-cash-flow ratio was 71.2x.

Market capitalization

On November 14, Amazon was the largest global Internet player in terms of market capitalization at ~$547.8 billion, In comparison, its peers posted the following market cap figures:

  • Alphabet: ~$718.2 billion
  • Facebook: ~$56.9 billion
  • Twitter: ~$14.9 billion
  • eBay: ~$36.8 billion

Analysts’ recommendations

Amazon was given a “buy” rating by 43 of the 47 analysts covering its stock. Three analysts recommended a “hold” while one recommended a “sell.” The analysts’ stock price target for the company is $1,220.70, and median price target for the company is $1,250.00.

More From Market Realist