Shares of tech giant Amazon (AMZN) rose 9.5% to close at $1,470.90 on December 26. Amazon stock has generated a return of 26% since the start of 2018. It’s fallen close to 27% since October and has slipped 13% this month.
The stock has generated returns of 115% in the last three years and 271% in the last five years.
Of the 47 analysts covering Amazon, 43 have given it “buys,” three have given it “holds,” and one has given it a “sell.” The average 12-month stock price target for Amazon is $2,136.26, indicating a potential upside of 45% from its current level.
Amazon’s sales are expected to rise 30.6% to $232.32 billion in 2018 and 20.3% to $279.55 billion in 2019. Its sales could rise another 18.5% to $331.37 billion in 2020. The company’s EPS are expected to rise a whopping 334% in 2018 and 34.9% in 2019.
Amazon’s EPS are expected to rise at a compound annual growth rate of 44.3% over the next five years compared to the company’s annual gain of 75% in the last five years.
Given its robust revenue and earnings growth, Amazon’s forward 2018 PE ratio of 68.7x doesn’t look too expensive.
Amazon’s bottom line will be driven by operating margin expansion. Its operating margin is expected to expand from 2.3% in 2017 to 5.4% in 2018 and 7.8% in 2020.