Friday, October 3, 2014

* Amazon.com (AMZN) - Five Chart that are Interesting if Not Breathtaking


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This visualization is provided by: Capital Market Laboratories

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Conclusion
AMZN has enormous (enormous) revenue and that revenue continues to grow.... well, enormously. AMZN has growing gross margin % in the last couple of years and has a growing book value. There's really only one thing AMZN is missing... Earnings.

Let's look at five visualizations that are interesting at the every least and breathtaking at the most.



Total Revenue (TTM)
That's a beautiful chart and it doesn't look like it ever wants to stop.  In the trailing-twelve-months AMZN has generated over $80B in revenue.  That's crazy...



Book Value per Share
AMZN's book value has increased rapidly with revenue, although I do note, as of right now, the stock is ~ 15x book.



Gross Margin %
Believe it or not... AMZN is growing its gross margin %.  That's almost unbelievable for a firm with revenue so large and growing so rapidly.  But, alas, there it is... gross margin % has risen from ~23% to now ~27%.  On $80B in revenue, that's ~$320 in gross profit increase.



Net Income (TTM)
Well... at one point (which isn't often spoken of) the firm produced a net income of over $1B in a year.  Actually, the firm did it for a while... That time is not now.



Peering
So here's the "problem" in a nutshell (or in a chart if you prefer). On the x-axis we have revenue.  We can see that in this peer group AMZN has the fifth largest total revenue falling into the same category as firms like MSFT, IBM, HPQ and AAPL.  It has larger revenue than GOOGL and ORCL (totally different businesses, of course.)

On the y-axis we have net income (aka earnings).  Check this out:



AMZN has HUGE revenue, but it's right near the bottom for earnings.  Contrast that with BABA, which has "only" $9B in revenue but $5B in net income (or so the financial filings read).

Now AMZN has introduced a mobile phone... so I suppose revenue will rise and rise and rise some more.  Will the firm earn any money... I have no idea...


This is trade analysis, not a recommendation.






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