Deciphering Amazon’s comprehensive valuation
Amazon has an enterprise value (or EV) of $548.2 billion. Its peers Alibaba (BABA), eBay (EBAY), PayPal (PYPL), and Baidu (BIDU) posted EV metrics of ~$461.7 billion, ~$40.8 billion, ~$84.6 billion, and ~$76.7 billion, respectively.
Amazon’s EV-to-adjusted-EBITDA[1. enterprise value to earnings before interest, tax, depreciation, and amortization] for the trailing 12 months is 40.6x. The company’s EV-to-estimated-EBITDA is 29.6x. Amazon’s EBITDA margin for 2017 is 8.0%.
Amazon’s EV-to-sales multiple for the trailing 12 months is 3.4x, while its expected EV-to-sales ratio in 2018 is 2.4x.
Amazon’s trailing-12-month EV-to-cash-flow multiple and trailing-12-month EV-to-free-cash-flow multiple are 32.7x and 71.2x, respectively.
Inside Amazon’s price metrics
With a book value per share of $51.20, Amazon is trading at a price-to-book value of 22.2x. The stock’s estimated book value per share for 2018 is $52.50.
The price-to-sales ratio for Amazon is expected to be 3.4x for 2017, and its estimated price-to-sales ratio is 3.1x for 2018.
EBITDA measures on focus
Amazon’s EBITDA of $13.5 billion for 2017 declined 34.0% and is expected to fall 26.0% in 2018. The stock is trading at price-to-EBITDA ratio of 40.5x.
Earnings and sales
Amazon reported EPS (earnings per share) of $5.00 in 2017, while its EPS for 2018 is forecast to be $4.30.
Amazon’s EPS for 2017 is expected to originate from total sales of $161.2 billion, which grew 26.0% annually. Sales for 2018 are expected to expand to $228.1 billion.
How much debt is Amazon carrying?
Amazon’s (AMZN) balance sheet reflects total debt of $24.7 billion. The company reported total capital of ~$49.4 billion. Its total-debt-to-total-capital ratio is 50.0%.
The company’s debt-to-assets, debt-to-equity, and debt-to-EBITDA multiples are 0.21, 100.2, and 1.8, respectively. The company’s debt ratios as interest coverage ratio reveal an EBIT-to-interest ratio of 22.6x. The company has a debt-to-enterprise value of 5.0%.