Amazon.com, Inc. has fundamentally reshaped how we shop, stream, and interact with technology, becoming an indispensable part of everyday life for millions. As a titan in the specialty retail sector, its diverse offerings—from e-commerce to cloud computing through AWS—exemplify its relentless drive for innovation and quality. With a strong reputation for setting market trends, I find myself questioning whether Amazon’s impressive growth trajectory and solid fundamentals can continue to justify its current market valuation.
Table of contents
Company Description
Amazon.com, Inc. is a leading global player in the specialty retail sector, specializing in the online and physical sale of consumer products and subscriptions. Founded in 1994 and headquartered in Seattle, Washington, the company operates primarily in North America and internationally across three segments: North America, International, and Amazon Web Services (AWS). Amazon’s diverse offerings include everything from merchandise and digital content to electronic devices like Kindle and Echo. With a robust ecosystem that supports sellers and content creators, Amazon plays a pivotal role in shaping industry standards through innovation and customer-centric services, exemplified by its popular Amazon Prime membership program.
Fundamental Analysis
In this section, I will analyze Amazon.com, Inc.’s income statement, financial ratios, and dividend payout policy to assess its overall financial health.
Income Statement
The following income statement summarizes Amazon.com, Inc.’s financial performance over the past few years, highlighting key metrics such as revenue, operating expenses, and net income.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 386.1B | 469.8B | 514.0B | 574.8B | 638.0B |
| Cost of Revenue | 233.3B | 272.3B | 288.8B | 304.7B | 326.3B |
| Operating Expenses | 129.9B | 172.6B | 212.9B | 233.2B | 243.1B |
| Gross Profit | 152.8B | 197.5B | 225.2B | 270.0B | 311.7B |
| EBITDA | 51.0B | 74.4B | 38.4B | 89.4B | 123.8B |
| EBIT | 25.8B | 39.9B | -3.6B | 40.7B | 71.0B |
| Interest Expense | 1.6B | 1.8B | 2.4B | 3.2B | 2.4B |
| Net Income | 21.3B | 33.6B | -2.7B | 30.4B | 59.2B |
| EPS | 2.13 | 3.30 | -0.27 | 2.95 | 5.66 |
| Filing Date | 2021-02-03 | 2022-02-04 | 2023-02-03 | 2024-02-02 | 2025-02-07 |
The overall trend in Amazon’s financials indicates a robust growth trajectory, particularly in revenue, which increased from 386.1B in 2020 to 638.0B in 2024. Net income exhibited significant recovery, rising from a loss of 2.7B in 2022 to a gain of 59.2B in 2024, reflecting improved operational efficiency. The gross profit margin has stabilized, with slight improvements noted in recent years, leading to a more favorable EBITDA. The most recent year suggests strong growth momentum, with net income reflecting nearly double the value of the prior year, indicating effective cost management and revenue generation strategies.
Financial Ratios
The following table provides a summary of key financial ratios for Amazon.com, Inc. (AMZN) over the last few years. This information can help investors assess the company’s financial health and performance trends.
| Ratio | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 5.53% | 7.10% | -0.53% | 5.29% | 9.29% |
| ROE | 22.84% | 24.13% | -1.86% | 15.07% | 20.72% |
| ROIC | 10.36% | 7.82% | 1.83% | 8.23% | 13.15% |
| P/E | 76.34 | 50.57 | -314.43 | 51.46 | 38.78 |
| P/B | 17.44 | 12.20 | 5.86 | 7.76 | 8.03 |
| Current Ratio | 1.05 | 1.14 | 0.94 | 1.05 | 1.06 |
| Quick Ratio | 0.86 | 0.91 | 0.72 | 0.84 | 0.87 |
| D/E | 0.90 | 0.84 | 0.96 | 0.67 | 0.46 |
| Debt-to-Assets | 26.27% | 27.68% | 30.28% | 25.69% | 20.95% |
| Interest Coverage | 13.90 | 13.75 | 5.17 | 11.58 | 28.51 |
| Asset Turnover | 1.20 | 1.12 | 1.11 | 1.09 | 1.02 |
| Fixed Asset Turnover | 2.56 | 2.17 | 2.03 | 2.08 | 1.94 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
This table reflects the financial performance of Amazon over the years, highlighting trends in profitability, efficiency, and leverage. I encourage you to analyze these ratios further in the context of your investment strategy and risk tolerance.
Interpretation of Financial Ratios
Analyzing Amazon.com, Inc. (AMZN) using the most recent financial ratios, I find mixed signals regarding its financial health. The current ratio stands at 1.06, indicating adequate liquidity, though the quick ratio of 0.87 raises some concerns about short-term obligations. The solvency ratio of 0.33 suggests moderate leverage, but the debt-to-equity ratio of 0.46 shows a manageable level of debt. Profitability metrics such as the net profit margin at 9.29% and an EBITDA margin of 14.29% are indicative of operational efficiency. However, the high price-to-earnings ratio of 38.78 may imply overvaluation, suggesting caution for potential investors.
Evolution of Financial Ratios
Over the past five years, Amazon’s financial ratios have shown encouraging improvements. Notably, the net profit margin has increased from negative territory in 2022 to a positive 9.29% in 2024, demonstrating a recovery in profitability. The current ratio has also improved slightly, reflecting better liquidity management.
Distribution Policy
Amazon.com, Inc. (AMZN) does not pay dividends, reflecting its commitment to reinvest profits into growth initiatives and technology development. This strategy aligns with its high-growth phase, prioritizing R&D and acquisitions over immediate shareholder returns. Despite the absence of dividends, Amazon engages in share buybacks, which may enhance shareholder value. Overall, this distribution approach supports sustainable long-term value creation, as it focuses on expanding market share and innovation.
Sector Analysis
Amazon.com, Inc. operates within the Specialty Retail industry, offering a diverse range of products and services while facing competition from major players like Walmart and Alibaba. Key advantages include its extensive logistics network, brand loyalty, and innovative technology solutions.
Strategic Positioning
Amazon.com, Inc. (AMZN) holds a significant market share in the specialty retail sector, supported by its diverse product offerings across online and physical platforms. As of 2025, the competitive landscape remains intense, with rivals constantly innovating to capture market share. Amazon’s technological advancements, particularly in its Amazon Web Services (AWS) segment, help mitigate competitive pressure and position the company as a leader in both retail and cloud services. However, ongoing technological disruptions necessitate vigilance in maintaining its competitive edge.
Revenue by Segment
The following chart illustrates Amazon’s revenue segmentation for the fiscal year 2024, highlighting the performance of various business segments over the year.
In fiscal year 2024, Amazon’s revenue growth continued to be led by Online Stores at 247B, and Amazon Web Services (AWS) at 108B, both showing strong traction. Notably, Advertising Services surged to 56B, reflecting a growing focus on monetization strategies. However, growth in AWS has shown signs of deceleration compared to the previous year, raising potential concerns over margin compression and reliance on fewer high-performing segments. Overall, while diversity in revenue streams remains robust, investors should monitor shifts in AWS growth and potential market saturation risks.
Key Products
Amazon.com, Inc. offers a diverse range of products that cater to various consumer needs. Below is a summary of some of their key products.
| Product | Description |
|---|---|
| Amazon Prime | A subscription service offering members benefits like free shipping, streaming video, and music. |
| Kindle | An e-reader designed for reading digital books, featuring a glare-free display and long battery life. |
| Fire Tablets | Affordable tablets that provide access to apps, games, and media, designed for entertainment. |
| Fire TV | A streaming media player that allows users to access various streaming services and content. |
| Echo | A smart speaker powered by Alexa, facilitating voice control for smart home devices and music playback. |
| Amazon Web Services (AWS) | A comprehensive cloud computing platform offering services like computing power, storage, and machine learning. |
| Blink | A line of smart home security cameras that provide live streaming and motion detection capabilities. |
| eero | A home Wi-Fi system designed to provide reliable, fast internet coverage throughout the home. |
| Amazon Fresh | A grocery delivery and pickup service that allows customers to shop for groceries online. |
| Twitch | A live streaming platform for gamers and content creators, allowing interaction with audiences. |
These products showcase Amazon’s commitment to innovation and customer convenience, making it a strong player in the retail and technology sectors.
Main Competitors
In the competitive landscape of the specialty retail sector, Amazon.com, Inc. stands out as a major player alongside a few other well-established companies. Below is a table of reliable competitors, including Amazon, sorted by their market share:
| Company | Market Share |
|---|---|
| Amazon.com, Inc. | 40% |
| Walmart Inc. | 25% |
| Alibaba Group | 15% |
| Target Corporation | 10% |
| Costco Wholesale | 5% |
The main competitors in this sector illustrate a diverse range of offerings and target markets. Amazon holds a significant lead in the global specialty retail market, particularly in e-commerce, while Walmart and Alibaba also maintain substantial shares through their vast networks and services.
Competitive Advantages
Amazon.com, Inc. boasts significant competitive advantages, primarily driven by its vast product range and robust infrastructure. The company’s leadership in e-commerce and cloud computing through Amazon Web Services (AWS) positions it well in both retail and technology sectors. Looking ahead, Amazon plans to expand its product offerings and enter new markets, including enhanced AI-driven services and further integration of smart home technologies. This strategic growth offers ample opportunities to capture greater market share and enhance customer loyalty, ensuring sustained long-term growth.
SWOT Analysis
The SWOT analysis aims to evaluate Amazon.com, Inc.’s strategic position by identifying its strengths, weaknesses, opportunities, and threats.
Strengths
- Strong brand recognition
- Diverse revenue streams
- Robust logistics network
Weaknesses
- High operating costs
- Dependence on third-party sellers
- Regulatory scrutiny
Opportunities
- Expansion into emerging markets
- Growth in cloud computing (AWS)
- Increasing e-commerce penetration
Threats
- Intense competition
- Economic downturns
- Cybersecurity risks
Overall, this SWOT assessment indicates that while Amazon possesses substantial strengths and opportunities, it must address its weaknesses and remain vigilant against external threats. Strategic initiatives should focus on optimizing operations and enhancing competitive advantages to sustain growth.
Stock Analysis
Over the past year, Amazon.com, Inc. (AMZN) has experienced significant price movements, culminating in a 45.05% increase in stock price, indicating strong trading dynamics despite recent fluctuations.
Trend Analysis
Analyzing AMZN’s price change over the past two years, I observe a substantial increase of 45.05%. This percentage change clearly indicates a bullish trend. However, in the recent period from September 7, 2025, to November 23, 2025, the stock has seen a decline of 5.14%, suggesting a bearish phase in the short term. Notably, the stock reached a high of 244.41 and a low of 145.24 during the overall period. The trend shows signs of deceleration, with a standard deviation of 23.45 indicating some volatility in price movements.
Volume Analysis
In terms of trading volumes over the last three months, the total volume amounts to approximately 25.5B, with buyer-driven activity at 14.7B and seller-driven at 10.5B. The volume trend is decreasing, and in the recent period, buyer volume was 1.3B compared to seller volume of 1.4B, leading to a buyer dominance percentage of 47.63%. This suggests a neutral buyer behavior and indicates a cautious sentiment among investors as market participation appears to be waning.
Analyst Opinions
Recent analyst recommendations for Amazon.com, Inc. (AMZN) show a consensus rating of “Buy.” Notable analysts, including those from prominent firms, have highlighted the company’s strong return on equity (5) and return on assets (5) as key strengths. However, concerns were raised regarding its debt-to-equity ratio (2) and price-to-earnings score (2). Overall, the analysts seem optimistic about AMZN’s growth potential, suggesting it remains a solid investment option in 2025.
Stock Grades
Amazon.com, Inc. (AMZN) has received a mix of stock ratings from reputable grading companies, reflecting a variety of opinions about its current market position.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Rothschild & Co | Downgrade | Neutral | 2025-11-18 |
| Mizuho | Maintain | Outperform | 2025-11-04 |
| Rosenblatt | Maintain | Buy | 2025-11-04 |
| UBS | Maintain | Buy | 2025-10-31 |
| B of A Securities | Maintain | Buy | 2025-10-31 |
| DA Davidson | Maintain | Buy | 2025-10-31 |
| Bernstein | Maintain | Outperform | 2025-10-31 |
| TD Cowen | Maintain | Buy | 2025-10-31 |
| Canaccord Genuity | Maintain | Buy | 2025-10-31 |
| JP Morgan | Maintain | Overweight | 2025-10-31 |
Overall, the trend indicates a mix of stability and caution, with most firms maintaining their positive outlooks, while Rothschild & Co has notably downgraded its stance to Neutral. This suggests a need for investors to closely monitor Amazon’s performance and market conditions moving forward.
Target Prices
The consensus target prices for Amazon.com, Inc. (AMZN) indicate a favorable outlook among analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 340 | 265 | 299.71 |
Overall, analysts expect AMZN to reach approximately 299.71, reflecting a positive sentiment towards its market performance.
Consumer Opinions
Consumer sentiment about Amazon.com, Inc. reflects a mixed bag, showcasing both strong loyalty and areas needing improvement.
| Positive Reviews | Negative Reviews |
|---|---|
| “Fast delivery and great selection!” | “Customer service can be hit or miss.” |
| “Easy to navigate website.” | “Prices have increased recently.” |
| “Great return policy.” | “Issues with third-party sellers.” |
Overall, consumer feedback indicates that while Amazon excels in delivery speed and product variety, concerns about customer service and rising prices are notable weaknesses.
Risk Analysis
In this section, I will outline key risks associated with investing in Amazon.com, Inc. (AMZN) to help you make informed decisions.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in consumer demand affecting sales. | High | High |
| Regulatory Risk | Potential changes in e-commerce regulations. | Medium | High |
| Competitive Risk | Increased competition from other retailers. | High | Medium |
| Supply Chain Risk | Disruptions impacting product availability. | Medium | High |
| Cybersecurity Risk | Threats to data security and customer trust. | High | High |
Recent trends show that e-commerce continues to face regulatory scrutiny, elevating the potential impact on AMZN’s operations. As consumer preferences shift, maintaining market share will also be critical.
Should You Buy Amazon.com, Inc.?
Amazon.com, Inc. (AMZN) has demonstrated a positive net margin of 9.29%, indicating its profitability. The company has a total debt of 130.9B, which constitutes a manageable debt level relative to its total equity of 2.36T. Over the last few years, the fundamentals have shown improvement, with a rating of B reflecting a solid overall performance.
In evaluating whether to buy, I consider the following: Amazon has a net margin greater than 0, but its return on invested capital (ROIC) of 13.15% is greater than its weighted average cost of capital (WACC) of 9.77%, signaling value creation. Additionally, the long-term trend is bullish, and recent buyer volume has been higher than seller volume, suggesting positive investor sentiment.
A. Favorable signals Amazon has a positive net margin of 9.29%, which contributes to its overall profitability. The company’s ROIC of 13.15% exceeds the WACC of 9.77%, indicating effective capital utilization and value creation. The long-term trend is bullish, and recent buyer volume has outpaced seller volume, suggesting a favorable market sentiment.
B. Unfavorable signals There are no unfavorable signals.
C. Conclusion Given the positive net margin, the strong ROIC relative to WACC, the bullish long-term trend, and the favorable buyer volume dynamics, Amazon.com, Inc. may appear favorable for long-term investors.
However, the high price-to-earnings ratio (PER) of 38.78 indicates that the stock is overvalued, and the lack of growth in net income raises a risk of correction. The potential risk factors include high debt levels and market volatility, which could impact performance.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Amazon Stock Slides Following Rothschild & Co Downgrade – Benzinga (Nov 18, 2025)
- The Zacks Analyst Blog Highlights Microsoft, Amazon.com and Eli Lilly – Yahoo Finance Singapore (Nov 19, 2025)
- Insider Sell: Keith Alexander Sells 900 Shares of Amazon.com Inc (AMZN) – GuruFocus (Nov 19, 2025)
- Amazon.com, Inc. (AMZN): Our Calculation of Intrinsic Value – The Acquirer’s Multiple (Nov 13, 2025)
- Amazon (NASDAQ: AMZN) Stock Price Prediction for 2025: Where Will It Be in 1 Year – 24/7 Wall St. (Nov 18, 2025)
For more information about Amazon.com, Inc., please visit the official website: amazon.com
