Is NASDAQ:AMZN on the Verge of a Major Breakout as a Strong Growth Stock?

Last update: Oct 10, 2024

Growth investors are on the lookout for stocks displaying robust revenue and EPS growth. In this analysis, we'll assess whether AMAZON.COM INC (NASDAQ:AMZN) aligns with growth investing criteria, especially as it consolidates and signals a possible breakout. As always, investors should conduct their own research, but AMAZON.COM INC has surfaced on our radar for growth with base formation, warranting further examination.

Growth Examination for NASDAQ:AMZN

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:AMZN has earned a 8 for growth:

The Earnings Per Share has grown by an impressive 202.90% over the past year.
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.
The Revenue has grown by 12.32% in the past year. This is quite good.
The Revenue has been growing by 19.80% on average over the past years. This is quite good.
Based on estimates for the next years, AMZN will show a very strong growth in Earnings Per Share. The EPS will grow by 29.46% on average per year.
Based on estimates for the next years, AMZN will show a quite strong growth in Revenue. The Revenue will grow by 10.89% on average per year.
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.

What does the Health looks like for NASDAQ:AMZN

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:AMZN, the assigned 5 for health provides valuable insights:

An Altman-Z score of 5.46 indicates that AMZN is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.46, AMZN belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
AMZN has a debt to FCF ratio of 1.66. This is a very positive value and a sign of high solvency as it would only need 1.66 years to pay back of all of its debts.
AMZN has a Debt to FCF ratio of 1.66. This is in the better half of the industry: AMZN outperforms 65.63% of its industry peers.
AMZN has a Debt/Equity ratio of 0.30. This is a healthy value indicating a solid balance between debt and equity.

Exploring NASDAQ:AMZN's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:AMZN has achieved a 7:

AMZN has a better Return On Assets (8.01%) than 75.00% of its industry peers.
The Return On Equity of AMZN (18.79%) is better than 68.75% of its industry peers.
AMZN has a better Return On Invested Capital (11.11%) than 71.88% of its industry peers.
The 3 year average ROIC (6.30%) for AMZN is below the current ROIC(11.11%), indicating increased profibility in the last year.
AMZN's Profit Margin of 7.35% is fine compared to the rest of the industry. AMZN outperforms 78.13% of its industry peers.
AMZN's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 9.00%, AMZN is doing good in the industry, outperforming 75.00% of the companies in the same industry.
AMZN's Operating Margin has improved in the last couple of years.
AMZN's Gross Margin of 48.04% is fine compared to the rest of the industry. AMZN outperforms 68.75% of its industry peers.
AMZN's Gross Margin has improved in the last couple of years.

Looking at the Setup

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple 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. We see reduced volatility while prices have been consolidating in the most recent period. There is a support zone below the current price at 183.21, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

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

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

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.