AMZN gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 30 industry peers in the Broadline Retail industry. While AMZN has a great profitability rating, there are some minor concerns on its financial health. AMZN shows excellent growth, but is valued quite expensive already.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

AMZN had positive earnings in the past year.
AMZN had a positive operating cash flow in the past year.
AMZN had positive earnings in 4 of the past 5 years.
In the past 5 years AMZN always reported a positive cash flow from operatings.

1.2 Ratios

Looking at the Return On Assets, with a value of 10.51%, AMZN belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
AMZN has a Return On Equity of 20.69%. This is amongst the best in the industry. AMZN outperforms 83.33% of its industry peers.
With a decent Return On Invested Capital value of 11.98%, AMZN is doing good in the industry, outperforming 80.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AMZN is in line with the industry average of 9.28%.
The 3 year average ROIC (8.31%) for AMZN is below the current ROIC(11.98%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	10.51%
ROE	20.69%
ROIC	11.98%

ROA(3y)4.89%

ROA(5y)5.85%

ROE(3y)11.31%

ROE(5y)16.18%

ROIC(3y)8.31%

ROIC(5y)8.44%

1.3 Margins

AMZN has a better Profit Margin (11.06%) than 86.67% of its industry peers.
AMZN's Profit Margin has improved in the last couple of years.
AMZN has a Operating Margin of 11.02%. This is in the better half of the industry: AMZN outperforms 80.00% of its industry peers.
In the last couple of years the Operating Margin of AMZN has grown nicely.
AMZN has a better Gross Margin (50.05%) than 70.00% of its industry peers.
In the last couple of years the Gross Margin of AMZN has grown nicely.

		Industry Rank	Sector Rank
OM	11.02%
PM (TTM)	11.06%
GM	50.05%

OM growth 3Y26.58%

OM growth 5Y15.69%

PM growth 3Y9.36%

PM growth 5Y17.59%

GM growth 3Y5.14%

GM growth 5Y3.57%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

AMZN has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, AMZN has more shares outstanding
The number of shares outstanding for AMZN has been increased compared to 5 years ago.
AMZN has a better debt/assets ratio than last year.

2.2 Solvency

AMZN has an Altman-Z score of 6.01. This indicates that AMZN is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.01, AMZN belongs to the top of the industry, outperforming 86.67% of the companies in the same industry.
The Debt to FCF ratio of AMZN is 4.81, which is a neutral value as it means it would take AMZN, 4.81 years of fcf income to pay off all of its debts.
AMZN has a Debt to FCF ratio (4.81) which is comparable to the rest of the industry.
AMZN has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
AMZN's Debt to Equity ratio of 0.14 is fine compared to the rest of the industry. AMZN outperforms 76.67% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.14
Debt/FCF	4.81
Altman-Z	6.01

ROIC/WACC1.36

WACC8.83%

2.3 Liquidity

AMZN has a Current Ratio of 1.01. This is a normal value and indicates that AMZN is financially healthy and should not expect problems in meeting its short term obligations.
AMZN's Current ratio of 1.01 is on the low side compared to the rest of the industry. AMZN is outperformed by 83.33% of its industry peers.
A Quick Ratio of 0.80 indicates that AMZN may have some problems paying its short term obligations.
AMZN has a Quick ratio of 0.80. This is in the lower half of the industry: AMZN underperforms 76.67% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.01
Quick Ratio	0.8

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

AMZN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 51.61%, 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 36.89% on average per year.
The Revenue has grown by 11.48% in the past year. This is quite good.
AMZN shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.86% yearly.

EPS 1Y (TTM)51.61%

EPS 3Y37.19%

EPS 5Y36.89%

EPS Q2Q%36.36%

Revenue 1Y (TTM)11.48%

Revenue growth 3Y10.74%

Revenue growth 5Y17.86%

Sales Q2Q%13.4%

3.2 Future

Based on estimates for the next years, AMZN will show a very strong growth in Earnings Per Share. The EPS will grow by 20.82% 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 11.20% on average per year.

EPS Next Y31.73%

EPS Next 2Y21.07%

EPS Next 3Y21.22%

EPS Next 5Y20.82%

Revenue Next Year12.08%

Revenue Next 2Y11.7%

Revenue Next 3Y11.5%

Revenue Next 5Y11.2%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

AMZN is valuated quite expensively with a Price/Earnings ratio of 33.68.
Compared to the rest of the industry, the Price/Earnings ratio of AMZN is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 27.25. AMZN is valued slightly more expensive when compared to this.
A Price/Forward Earnings ratio of 29.41 indicates a quite expensive valuation of AMZN.
The rest of the industry has a similar Price/Forward Earnings ratio as AMZN.
AMZN's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.98.

		Industry Rank	Sector Rank
PE	33.68
Fwd PE	29.41

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as AMZN.
Based on the Price/Free Cash Flow ratio, AMZN is valued a bit more expensive than 63.33% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	241.36
EV/EBITDA	17.94

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of AMZN may justify a higher PE ratio.
AMZN's earnings are expected to grow with 21.22% in the coming years. This may justify a more expensive valuation.