Amazon.com sells a range of products and services through its websites, including merchandise and content that it purchases for resale from vendors and those offered by third-party sellers. The company also manufactures and sells electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, Echo and Fire phones. The company was founded in 1994 and is based in Seattle, Washington.
AMZN Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Amazon Com Inc. To summarize, we found that Amazon Com Inc ranked in the 64th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. As for the metrics that stood out in our discounted cash flow analysis of Amazon Com Inc, consider:
As a business, AMZN is generating more cash flow than 97.13% of positive cash flow stocks in the Technology.
The business' balance sheet reveals debt to be 4% of the company's capital (with equity being the remaining amount). Approximately merely 11.79% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
AMZN's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 49.49% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as AMZN, try GENH, WIX, PERI, ELTK, and MTCH.
Regarding Amazon (NASDAQ:AMZN) my bullish sentiment has progressively increased in recent months. I have written several articles in which I have focused on a small item of Amazon’s income "other income," in which revenue derived from online ads is imputed. In my articles I explained the importance that, in my...
Francisco Javier Garcia on Seeking Alpha | July 16, 2020
In my ongoing series on "7 Ways to Beat the Market", I have suggested that equal weighting - along with size, value, low volatility, dividend growth, quality, and momentum - are simple and easy-to-implement factor tilts or alternative weighting schema that can boost performance. By tilting allocations away from the...