NASDAQ:AMZN, a strong growth stock, setting up for a breakout.

For growth-minded investors, high revenue and EPS growth are key criteria. Today, we'll examine whether AMAZON.COM INC (NASDAQ:AMZN) fits the bill for growth investing, particularly as it forms a base and hints at a potential breakout. Remember, due diligence is essential, but AMAZON.COM INC has caught our attention on our screen for growth with base formation. It may warrant additional investigation.

ChartMill's Evaluation of Growth

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NASDAQ:AMZN was assigned a score of 8 for growth:

• AMZN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 292.31%, which is quite impressive.
• Measured over the past years, AMZN shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.57% on average per year.
• AMZN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.54%.
• Measured over the past years, AMZN shows a quite strong growth in Revenue. The Revenue has been growing by 19.80% on average per year.
• The Earnings Per Share is expected to grow by 29.46% on average over the next years. This is a very strong growth
• The Revenue is expected to grow by 10.89% on average over the next years. This is quite good.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Assessing Health for NASDAQ:AMZN

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:AMZN has earned a 5 out of 10:

• AMZN has an Altman-Z score of 5.63. This indicates that AMZN is financially healthy and has little risk of bankruptcy at the moment.
• AMZN's Altman-Z score of 5.63 is fine compared to the rest of the industry. AMZN outperforms 78.79% of its industry peers.
• The Debt to FCF ratio of AMZN is 1.81, which is an excellent value as it means it would take AMZN, only 1.81 years of fcf income to pay off all of its debts.
• AMZN has a better Debt to FCF ratio (1.81) than 66.67% of its industry peers.
• AMZN has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:AMZN, the assigned 7 is noteworthy for profitability:

• AMZN has a Return On Assets of 7.10%. This is in the better half of the industry: AMZN outperforms 72.73% of its industry peers.
• Looking at the Return On Equity, with a value of 17.39%, AMZN is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
• The Return On Invested Capital of AMZN (10.16%) is better than 75.76% of its industry peers.
• The 3 year average ROIC (6.24%) for AMZN is below the current ROIC(10.16%), indicating increased profibility in the last year.
• AMZN has a better Profit Margin (6.38%) than 72.73% of its industry peers.
• In the last couple of years the Profit Margin of AMZN has grown nicely.
• The Operating Margin of AMZN (8.02%) is better than 69.70% of its industry peers.
• In the last couple of years the Operating Margin of AMZN has grown nicely.
• With a decent Gross Margin value of 47.59%, AMZN is doing good in the industry, outperforming 63.64% of the companies in the same industry.
• In the last couple of years the Gross Margin of AMZN has grown nicely.

Why is NASDAQ:AMZN a setup?

Alongside the Technical Rating, ChartMill assigns a Setup Rating to evaluate the consolidation level of a stock. This rating, ranging from 0 to 10, is updated daily and considers various short-term technical indicators. The current setup rating for NASDAQ:AMZN is 7:

Besides having an excellent technical rating, AMZN also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 197.94. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 187.01, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Our latest full fundamental report of AMZN contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of AMZN

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.