The stock market is back and thriving again, and some companies have shown how strong they are even in the worst economic times.
Amazon is one such company, and if you look at their performance in the last six months, you can see them become one of the best if not the best stock to have in the world.
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Amazon and their activity in the market
First, we will begin by going through Amazon’s financials and other basic points in the company’s growth and presence in the economy.
From here, you will see the company for the progress and growth it is looking towards.
Today, Amazon’s market value lies at around 1.5 trillion dollars, and their P.E. Ratio lies at 89.28. Since the pandemic, Amazon has seen tremendous growth in its cash flow.
The pandemic was just what the company needed to skyrocket out of the ordinary. They have seen billions of dollars in free cash flow, and their Q2 and Q3 reports have done nothing but put smiles on the faces of their investors.
Of course, we suspect that the extent of growth will drop once people start going out to buy things, but if they could gain 2 or 3 years’ worth of growth in 1 year, they can do just fine in the years to come.
Their operating income within the stock market has also been good. In the last year, the company has seen an over 90% rise in operating income.
That is amazing and worthy of applause. The company pulled in a lot of operating income during this time, and well, the results are everything to write home about. Their balance sheet is also looking good, at least within the last nine months or so.
Their net product sales went from a little over 109 billion dollars in 2019 to over 144 billion dollars in 2020. This indicates the growth the company is getting and how much more growth we can expect to see. Their net service sales went from about 83 billion dollars to 115 billion.
This rounds off their total sales at 260 billion.
And their costs are also looking good enough. In just under a year, they have made many investments and costs that I believe are a lot more beneficial to them and their development.
We see the cost for the fulfillment, which is shipping and delivery costs, at 40 billion. We also see their technology and content cost at 30 billion, which shows they have spent a lot to develop their internet use, that’s a plus.
Their marketing cost is at 14 billion, I would say they should have done a bit more for marketing, but I guess they are doing well already. Then their administrative cost sits at 4.7 billion. In the end, their total cost rounds up to 244 billion.
Yes, you can say that they are a low margin earning company since they spent 244 billion to earn 260 billion.
But when you look at things in the light of the present economic and global situations, you realize that eventually, they will not be making all of the expenses recurring.
Yes, they might have to invest more in fulfillment costs; they will, at some point, lay back and not invest so much in it again. The same goes for the expense of technology and marketing in the next year.
Right now, the company has an operating income of 16 billion. Income before taxes is at 16.4 billion, and after other expenses, we see the net income at 14 billion. In comparison to like 9 or 10 months behind where we saw 8 billion, you can say that this company has done excellently well. Their earnings per share are at 27 dollars per share; three months ago, this was at 12 dollars, so yeah, all I can see is growth.
Their international income information
Here I will be explaining how well they have done in the world.
Here is the breakdown from their recent report in September. Their net sales were at 160 billion dollars in North America, and their operating expense was 155 billion. Leaving their operating income at 5 billion.
Their international net sales are at 66.9 billion, and their expense ranked 66.5 billion. Leaving their operating income at about 300 million dollars.
This is great because Amazon has seen many losses over the years in their international sales, so this rise is sure to make a difference.
The next financials we will be looking at is Amazon’s AWS. This is a diversification I love, and in truth, there is so much to explore here. For AWS, amazon saw net sales of 32 billion dollars, an operating expense of about 22 billion, and a total operating income of just under 10 billion dollars.
Balance sheet report and stock buying choices
Their balance sheet is also looking good because we see that in under a year, the company saw a lot of raw cash running up to 282 billion dollars. They also have some long term debt at a total of about 32 billion.
Of course, the stock is sitting at over 3,000 dollars now, but like most stocks, we expect that there might be a dip in the long term, but nothing to be so worried about.
Here is one thing I like about the stock, and that is the possibility for growth.
I believe that even when things get back to normal, their sales will remain thriving, and then they can reduce a bit of expense, and the result will be a better net income.
Amazon in comparison to other big stocks
Let’s be honest here in comparison to Google, Microsoft, and Apple, Amazon (NASDAQ: AMZN) is on a stretch of growth and excellence.
Yes, their growth margin isn’t fantastic, but it is steady and doing great. Their liabilities about their assets are in a good place. If you look at the debt and liabilities those other three companies hold on to; you could see that Amazon is a great choice.
The company has a long journey to go in its international presence, and yes, they have been running at a loss; they have increased their net sales in the last year, meaning that they are gaining momentum around the world.
In conclusion, Amazon’s bright future, and dare I say the future looks brighter for them than for others.
This is a stock I will keep investing in, and I trust many others will in the future.
Thank you for being around to take a look at this blog. If you have got this far then, I hope you have gained tremendous knowledge on Amazon and its potential on the stock market.
Leave a comment on what you think the future holds for the company.
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The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)
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