Should you buy Amazon stock? (May 2024)

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Amazon stock analysis. Ticker: $AMZN

Since reporting earnings on Tuesday, Amazon stock has gained about 5% taking the company’s market value to 1.92 trillion dollars. With 73 billion of cash on its balance sheet, 13 billion of investments and 58 billion of long term debt, the enterprise value is 1.89 trillion.

Revenue over the last 12 months is just under 600 billion with 38 billion of net income and 46 billion of free cash flow. So Amazon stock is now valued at 3.2 times revenue and 51 times earnings.

This was another impressive report from Amazon.

Revenue from online stores grew 7% and physical stores grew 6%. Third party seller services increased 16%. Advertising grew 24%. Subscription revenue grew 11%. And AWS climbed 17%

A focus on profitability helped overall operating margins climb to a new record of 8% and free cash flow continues to ramp higher. And that’s despite significant capital investments into GPUs and AI infrastructure.

A key contributor to Amazon’s strong performance is the cloud service AWS. Not only did AWS grow 17% year over year, operating margins for the business climbed to 38%. CEO Andy Jassy said last year that AWS would improve and it turns out he was right all along.

Advertising was another bright spot, trailing twelve month revenues are now up to 49 billion and Amazon’s other bets also grew 23%.

So Amazon continues to move forward, the question is what price should investors pay for this collection of businesses?