Amazon Stock Analysis - is Amazon's Stock a Good Buy Today? AMZN Stock Analysis

TL;DR

This video provides an analysis of Amazon's business segments, recent developments including excess capacity and a write-down in their Rivian investment, and a fair value calculation for the stock.

Transcript

hi i'm jimmy in this video looking at amazon stock ticker symbol amzn so the goal of this video is to look quickly at amazon's business then we're going to look at some recent developments specifically some headwinds that the company appears to be facing and then finally we're going to try to come up with a fair value for amazon stock using discoun... Read More

Key Insights

• 🐕‍🦺 Amazon's online stores business is its largest segment, followed by third-party seller services, AWS, subscription services, advertising services, and physical stores.
• 🥺 Excess capacity in Amazon's distribution network has led to lower profit margins in the short term.
• 🚱 The write-down in the Rivian investment affected Amazon's earnings, but adjusting for non-operational investments reveals positive earnings per share.
• 💗 Amazon's revenue has been growing quickly, but there are expectations for revenue growth to slow down in the coming years.
• 💗 Excess capacity is expected to be resolved as Amazon continues to grow.
• 👶 The stock split does not create any new value but changes the price per share and the number of shares outstanding.
• 🙂 The fair value calculation suggests that Amazon stock is currently slightly overvalued, and a drop in stock price would provide a buying opportunity.

Questions & Answers

Q: What are the main business segments of Amazon?

Amazon's main business segments are online stores, third-party seller services, AWS, subscription services, advertising services, and physical stores.

Q: How has excess capacity affected Amazon's profit margins?

Excess capacity has led to lower profit margins for Amazon as they have to pay for square footage they don't currently need or use. However, it is expected that they will grow into this excess capacity in the long run.

Q: What impact did the write-down in the Rivian investment have on Amazon's earnings?

The write-down in the Rivian investment resulted in negative earnings per share of $7.56. However, if we exclude non-operational investments like Rivian, the adjusted earnings per share is positive at 4.24 cents.

Q: How has Amazon's revenue been trending in recent years?

Amazon's revenue has been growing rapidly, but there is a concern that revenue growth will gradually decline in the future.

Summary & Key Takeaways

• Amazon's largest business segment is online stores, followed by third-party seller services, AWS (Amazon Web Services), subscription services, advertising services, and physical stores.

• Recent developments include excess capacity in their distribution network, leading to lower profit margins, and a write-down in their investment in Rivian.

• Amazon's revenue has been growing rapidly, but revenue growth is expected to gradually decline.