Amazon’s (AMZN) stock currently trades at 32 times its estimated earnings, well above the Nasdaq 100’s (^NDX) multiple but well below the 10-year estimated earnings average.
Market Domination host Julie Hyman joins Asking For A Trend to break down Amazon’s falling multiple in today’s Chart of the Day.
For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.
This post was written by Nicholas Jacobino
Video Transcript
Amazon stock trades at 32 times estimated earnings which is above the NASDAQ one hundreds multiple but below Amazon’s 10 year average finances, Julie Hyman, Georgia.
Now with a closer look.
Yeah, and this chart of the day prompted because it is Amazon prime day or prime days really because it lasts two days here.
And even though a lot of the reasons that people look at Amazon and not necessarily because of its retail business, it’s because of things like Aws, for example, still it is a spur for some investors to take a look at the stock.
JP Morgan, for example, estimates that gross merchandise volume, that is the total value of stuff sold on Amazon during its prime days rose by 12%.
Uh this time around to about $12.4 billion.
And he says a lot of that wouldn’t have happened if it weren’t for prime day and the deals that it spurred.
So that brings me to the multiple here, the price to forward earnings.
Now Bloomberg puts it at around 3233 here, which is indeed higher than the NASDAQ one hundreds and higher than some of its competitors but it is cheap on a historical level as we have seen those uh shares rally this year by more than 25% earlier.
Today, we heard from Gil Luria analyst who covers the stock and he talked about sort of the proposition of why people would be looking at Amazon right now.
We actually think Amazon at the end of the day may have more A I business than any of these other companies.
Aws is the biggest hyper scalar and it’s done a lot to catch up to Azure in terms of A I capabilities.
And yet, Amazon is getting very little credit in terms of multiple, it’s trading at, at average multiple compared to its historical rates.
And so we think that’s where when they get more credit, that stock will outperform and this at a time where the operating margin for Amazon is projected this year to be around 10%.
That would be about double what it’s been on average over the past five years.
Josh.
All right.
Thank you, Julie.
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