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Amazon.com, Inc. (AMZN) has been performing well in the year 2024 and the share’s price has reached $ 208.91, an increase by 1% in the latest session. As shown in the figures above, Amazon recently broke new record of all time highs and investors are now trying to decide whether, to whether it is a buy or hold or even whether it should be sold at the current prices.
The following data includes the analysis of Amazon’s share price, the indicators that show the company’s financial results, the latest development, the technical perspective and a recommendation.
Stocks of Amazon have had a great run this year, and YTD return stands at 37.50% outperforming the S&P 500’s return of 25.45%. The current stock price is very close to the 52 weeks high of $212.25 and the upward trend is a clear indication of investors’ expectations from Amazon in terms of current and future results. Year-to-date, the firm has been trading at 45.52% higher than the inventory price level, while the S&P 500 has risen by 35.53% in the same period.
Under its current market capitalization of $2.197 trillion, Amazon is listed as one of the world’s largest companies in its e-commerce, cloud, computer, and other industries. The five-year return of 135.84 % reveals profound growth in the company, which is a great investment for those interested in the so-called Big Tech firms.
Amazon’s financials show that it continues moving closer to becoming a true tech giant. As of now, it has a TTM of $620.13 billion and with a profit margin of 8.04%. Although, it does not currently pay dividends with dividend yield of zero, Amazon offer investors good profitability and growth prospects for capital appreciation.
In terms of profitability metrics, Amazon boasts a return on equity (ROE) of 22.56% and a return on assets (ROA) of 7.07%. These ratios indicate efficient asset management and strong returns for shareholders. With a P/E ratio of 44.64, Amazon’s stock may seem overvalued, but its earnings per share (EPS) of 4.68 and substantial free cash flow of $54.33 billion justify the premium price.
The financial positions of Amazon are also satisfying. The company has $88.05 billion in cash, which more than covers its active and long-term investments. Currently, the debt to equity ratio of 61.18% is reasonable to show a strong structure as well as the capability of funding the future aggressive growth of Amazon.
One important event in the recent past experienced by Amazon has been the continuous offering of shares by the company’s owner, Jeff Bezos. In November alone, Bezos even sold roughly $2.7bn in Amazon shares, and as of that, sold $12.5bn in total in 2024. These sales are all made pursuant to trading plans that have been publicly announced in advance, specifically a 10b5-1 trading plan that enables executives such as Bezos to dispose of company stock at set dates or times.
Ever since Bezos declared a new trading plan in March 2024, the general has seen him let go of 22 million shares out of a proposed 25 million by 2025. He has also given over five hundred and fifty five thousand shares for charity. While Bezos’ share sales are noteworthy, they are part of a planned strategy and do not necessarily reflect a lack of confidence in Amazon’s future.
Amazon’s technical outlook is bullish. The stock has recently broken above key resistance levels and reached a fresh all-time high of $212.25. The breakout above $200 was a great move on the weekly chart, indicating that the stock may continue higher.
If Amazon experiences a pullback, the $200 level could act as a strong support, potentially offering a buy opportunity for investors. If it maintains this level and gets rejected at it, it could see further gains, with targets around its previous high. Overall, Amazon’s technical signals suggest that it is in a strong uptrend with more room for potential upside.
Based on its financial strength, market position and recent technical performance, the stock appears to be a “buy” for long-term investors. Amazon’s strong revenue growth, high returns on equity and vast cash reserves provide it with a solid foundation to continue expanding and innovating.
Furthermore, its recent stock performance and the breakout above resistance levels indicate a bullish outlook, making it a suitable option for growth-oriented investors.
For investors already holding Amazon, a “hold” recommendation is appropriate if they are interested in seeing how Amazon capitalizes on its growth initiatives over the coming quarters. However, given the stock’s premium valuation, short-term traders may want to wait for a retracement to the $200 support level before adding to positions.
Amazon’s stock has shown impressive growth, supported by robust financials and market momentum. While Jeff Bezos’ share sales may raise questions, these transactions are planned and do not signal any immediate concerns. With its strong financial position, bullish technicals, and growth prospects, Amazon remains an attractive investment for long-term investors.
In summary, Amazon is a “buy” for those seeking exposure to a high-growth, industry-leading company. Existing investors can confidently hold their positions, while new investors may consider entering on any pullbacks, with a target price estimate of $231.81 as a reasonable objective in the near term.
