Is (AMZN) a good buy for the week? (AMZN) is venturing into new avenues with an aggressive expansion strategy. Would it make sense to invest now in the e-commerce giant? Let’s look at its financial metrics to find out more….

E-commerce and cloud computing giant, Inc. (AMZN) recently obtained clearance from the UK competition regulator to acquire Roomba vacuum cleaner maker iRobot Corporation (IRBT) for $1.7 billion. The Competition and Markets Authority (CMA) concluded that the transaction would not give rise to competition concerns UK.

However, EU antitrust regulators are also looking into the matter and will decide by July 6 whether to clear the deal. In addition to this, the United States Federal Trade Commission is expected to file an antitrust complaint against AMZN. Additionally, Bernstein analysts released an open letter to AMZN CEO Andy Jessy and the board stating that the company has been spending heavily in certain areas. without seeing the results.

Bernstein’s Mark Shmulik said: “But what we’ve seen recently is that a company is simply chasing too many ideas, with weaker ideas taking away oxygen, capital and, most importantly, focus from truly disruptive initiatives that “only Amazon can do.”

Therefore, let’s take a look at trends in some of its key financial metrics to understand why it might be wise to wait for a better entry point in the stock.

Amazon net income trends: A roller coaster of growth and decline from 2020 to 2023

The following is a summary of the last 12 months of AMZN net revenue trends and fluctuations during the period considered:

  • June 2020: $13.18 billion
  • September 2020: $17.38 billion
  • December 2020: $21.33 billion
  • March 2021: $26.90 billion
  • June 2021: $29.44 billion
  • September 2021: $26.26 billion
  • December 2021: $33.36 billion
  • March 2022: $21.41 billion
  • June 2022: $11.61 billion
  • September 2022: $11.32 billion
  • December 2022: -2.72 billion dollars
  • March 2023: $4.29 billion

AMZN’s net profit had an overall upward trend from June 2020 to December 2021. However, this trend is followed by a significant decline in net profit from December 2021 to March 2022, with the next two quarters in 2022 showing a decline in net profit.

The most recent data point, March 2023, reflects an increase in net income to $4.29 billion, which is a recovery from the negative net income seen in December 2022. The growth rate between the first value ($13.18 billion) and the last value ($4.29 billion) is around -67.45%.

AMZN has experienced a steady upward trend in revenue over the past 12 months during the period from June 2020 to March 2023. The data shows significant fluctuations and growth over this period. Here is a summary of the key points:

  • June 2020: $321.78 billion
  • September 2020: $347.95 billion (7.33% growth since June 2020)
  • December 2020: $386.06 billion (10.96% growth since September 2020)
  • March 2021: $419.13 billion (8.56% growth since December 2020)
  • June 2021: $443.30 billion (5.77% growth since March 2021)
  • September 2021: $457.97 billion (3.32% growth since June 2021)
  • December 2021: $469.82 billion (2.59% growth since September 2021)
  • March 2022: $477.75 billion (1.69% growth since December 2021)
  • June 2022: $485.90 billion (1.71% growth since March 2022)
  • September 2022: $502.19 billion (3.34% growth since June 2022)
  • December 2022: $513.98 billion (2.35% growth since September 2022)
  • March 2023: $524.90 billion (2.12% growth since December 2022)

The overall growth rate between the first value (June 2020) and the last value (March 2023) is 62.91%. Despite some minor fluctuations, AMZN’s earnings show a generally stable positive trend throughout the data series.

AMZN’s gross margin showed a general upward trend, with minor fluctuations over the period analyzed. Below is a summary of the data:

  • June 2020: 40.3%
  • September 2020: 40.2%
  • December 2020: 39.6%
  • March 2021: 40.0%
  • June 2021: 40.7%
  • September 2021: 41.3%
  • December 2021: 42.0%
  • March 2022: 42.1%
  • June 2022: 42.6%
  • September 2022: 43.0%
  • December 2022: 43.8%
  • March 2023: 44.7%

Focusing on recent data and the last value in the series, we observe that the gross margin has increased since September 2022, reaching 44.7% in March 2023. Calculating the growth rate by measuring the last value (44 .7%) from the first value (40.3%) shows an overall increase of about 4.4 percentage points over this period.

AMZN’s return on assets (ROA) showed fluctuations over the given period:

  • June 2020: 5.8%
  • September 2020: 7.0%
  • December 2020: 7.9%
  • March 2021: 9.1%
  • June 2021: 9.2%
  • September 2021: 7.6%
  • December 2021: 9.0%
  • March 2022: 5.4%
  • June 2022: 2.8%
  • September 2022: 2.7%
  • December 2022: -0.6%
  • March 2023: 1.0%

With greater emphasis on the most recent data and the last value in the series, the March 2023 ROA is 1.0%, down from the June 2020 ROA of 5.8%. Between June 2020 and March 2023, the overall growth rate is negative, with ROA decreasing by around 4.8 percentage points. Over this entire period, the highest ROA was recorded in June 2021 at 9.2%.

Amazon Stock Prices: A Six-Month Analysis (December 2022-June 2023)

The trend and growth rate of AMZN stock prices from December 23, 2022 to June 16, 2023 shows an overall upward trajectory with some fluctuations.

The growth rate accelerates noticeably from January 13, 2023 to February 3, 2023, followed by a relatively moderate deceleration until March 3, 2023. The share price then experiences slight fluctuations before accelerating again to from April 6, 2023. Here is a chart of AMZN’s price over the past 180 days.

Amazon POWR Ratings: Examining Growth, Sentiment, and Quality Trends

As of June 19, 2023, the last POWR Rankings the rating for AMZN is a C, which equates to Neutral. The stock belongs to the the Internet industry, which includes a total of 58 stocks.

Based on category rank data, AMZN has always maintained an average rank, where lower values ​​mean a higher rank. Here’s a look at AMZN’s recent performance:

  • December 24, 2022: POWR Grade of C and category rank of #31
  • January 2023: POWR rating remains at C, with category rank fluctuating between #29 and #30
  • February 2023: POWR rating of C, category rank ranges from #19 to #33
  • March 2023: POWR rating continues at C, category rank remains between #24 and #25
  • April 2023: Grade POWR to C, the rank in the category varies between #20 and #25
  • May 2023: POWR rating maintained at C, category rank increased from #15 to #17
  • June 2023 (until June 19): Grade POWR to C with stable category rank at No. 16

Although the POWR Ratings rating hasn’t changed much over the given period, AMZN’s ranking in its category has seen some fluctuations before stabilizing at its current position of 17.

AMZN experienced fluctuations in its POWR ratings in different dimensions from December 31, 2022 to June 17, 2023. The three most notable dimensions are Growth, Sentiment, and Quality.

  • Growth: AMZN’s Growth Score has seen a significant increase over this period, from a score of 17 as of December 31, 2022, to an impressive score of 86 as of June 17, 2023.
  • Feeling: Sentiment also showed substantial improvements. The rating started at 70 on December 31, 2022 and peaked at 99 on June 17, 2023, indicating a positive market perception of the company.
  • Quality: Throughout the period, AMZN maintained consistently high quality scores. Starting from a rating of 76 on December 31, 2022, it reached 79 on January 31, 2023 and remained above 75 until June 17, 2023.

These trends demonstrate positive changes in AMZN’s growth and sentiment dimensions, as well as a consistently high quality score over the specified time period.

How does, Inc. (AMZN) compare to its peers?

Other internet stocks that might be worth considering are trivago NV (TRVG), Yelp Inc. (YAP) and Travelzoo (TZOO) – they have better POWR ratings.

What to do next?

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AMZN shares were trading at $125.49 per share on Monday afternoon, down $1.62 (-1.27%). Year-to-date, AMZN has gained 49.39%, compared to a 15.35% rise in the benchmark S&P 500 over the same period.

About the Author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.


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