Week 8 Solomon Amazon
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Amazon Bond & Stock Analysis
NASDAQ: AMZN
Amazon Bond & Stock Analysis
NASDAQ: AMZN
LETTICIA SOLOMON
OCTOBER 11, 2020
FINANCE 330 6381
LETTICIA SOLOMON
OCTOBER 11, 2020
FINANCE 330 6381
Contents
Contents
Background
Financial Leverage Ratios
Bond Performance
Stock Performance
Historical Stock Prices
Capital Asset Pricing Model
Recommendations
References
Background
Financial Leverage Ratios
Bond Performance
Stock Performance
Historical Stock Prices
Capital Asset Pricing Model
Recommendations
References
Background
Background
Amazon is a leading Internet Retailer headquartered in Seattle Washington.
CEO. And founder: Jeffery P. Bezos
Number 2 on fortune 500 list
Over 800,000 employees worldwide
$3286.65 per share price
(Staff, 2020)
Amazon is a leading Internet Retailer headquartered in Seattle Washington.
CEO. And founder: Jeffery P. Bezos
Number 2 on fortune 500 list
Over 800,000 employees worldwide
$3286.65 per share price
(Staff, 2020)
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Financial Leverage Ratios
Financial Leverage Ratios
Dec 31, 2019
Dec 31, 2018
Dec 31, 2017
Dec 31, 2016
Dec 31, 2015
Debt to assets
0.23
0.26
0.30
0.21
0.24
Debt to equity
0.83
0.97
1.41
0.92
1.17
Interest Coverage
9.73
8.95
5.48
8.84
4.37
2015-2019 Ratio Averages
-Debt to Assets: $.25 million
-Debt to Equity:$1.06 million
-Interest Coverage:$7.47 million
•
Assets are mainly funded through retained earnings and Shareholders paid in capital
(Dybek, 2020)
Bond Performance
Bond Performance
Investors are likely to choose bonds with longer maturity date
Low credit risks
Callable
(Bond Results, 2020).
Investors are likely to choose bonds with longer maturity date
Low credit risks
Callable
(Bond Results, 2020).
Bond
Coupon
Maturity Date
Last Price
Last Yield
AMZN393628
4
2.50%
11/29/2020
104.19
0.30%
AMZN190395
3.30%
12/05/2021
102.93
0.39%
Stock Performance
Stock Performance
Amazon*
Walmart
Industry
P/E Ratio
122.57x***
26.61x***
89.44x**
P/B Ratio
20.52x***
4.90x***
18.51x**
ROE
20.47%***
19.13%***
1.71%***
ROA
6.00%***
11.02%***
-.40%***
-
Amazon has a higher ROE than the industry average at 20.47% compared to 1.17%
-
Amazon has a higher ROA at 6.00% compared to the industries -.40%.
-
Amazon has a higher level of profitability and better asset management against competitors based on these percentages.
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Historical Stock Prices
Historical Stock Prices
Amazon
Albaba
NOV 19
1788.01
179.01
DEC 19
1804.40
198.58
JAN 20
1875.00
216.60
FEB 20
2010.60
208.67
MAR 20
1906.49
208.59
APR 20
1932.97
189.50
MAY 20
2336.80
195.75
JUN 20
2488.00
205.90
JUL 20
2757.99
215.81
AUG 20
3180.51
254.02
SEP 20
3489.58
289.20
OCT 20
3208.00
295.26
-
Amazons major competitor is Alibaba
-
Amazon’s stock prices consistently rise every year.
-
In the past 12 months Amazon's stock prices have increased by $1421.
-
Alibaba’s stock prices consistently rise but are significantly lower than Amazon’s.
-
Amazon stocks are in high demand
-
Alibaba stocks are like
ly being sold
(Yahoo Finance, 2020)
Capital Asset Pricing Model (CAPM)
Capital Asset Pricing Model (CAPM)
Amazon has a beta of 1.60
Amazon has a ROE of 18.44%
Amazon does not pay a dividend and reinvests all cash flows into the company.
Amazon ‘s price grew over 475% in the past 5 years.
Amazon has a beta of 1.60
Amazon has a ROE of 18.44%
Amazon does not pay a dividend and reinvests all cash flows into the company.
Amazon ‘s price grew over 475% in the past 5 years.
Recommendations
Recommendations
Amazon appears overvalued against competitors but highly valuable against their own historical data.
Amazon has a highly attractive stock due to growth rate.
It is beneficial for Amazon to continue to reinvest net income into operations and hold off on share prices.
Amazon is growing fast all around and can stay the course with all current practices.
Amazon appears overvalued against competitors but highly valuable against their own historical data.
Amazon has a highly attractive stock due to growth rate.
It is beneficial for Amazon to continue to reinvest net income into operations and hold off on share prices.
Amazon is growing fast all around and can stay the course with all current practices.
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References
References
Bond Results. 2020. Retrieved from http://finramarkets.morningstar.com
Dybek, M. (2020, February 1).
Amazon.com Inc. (NASDAQ:AMZN): Analysis of Solvency Ratios
. https://www.stock-analysis-on.net/NASDAQ/Company/Amazoncom-Inc/Ratios/Long-
term-
Debt-and-Solvency.
Staff, F. (2020, August 10).
Amazon.com: 2020 Fortune 500
. https://fortune.com/company/amazon-com/fortune500/.
Yahoo Finance. (2020, October 6).
Alibaba Group Holding Limited (BABA) Stock Historical Prices & Data
. Yahoo! Finance. https://finance.yahoo.com/quote/BABA/history?
period1=1570233600.
Bond Results. 2020. Retrieved from http://finramarkets.morningstar.com
Dybek, M. (2020, February 1).
Amazon.com Inc. (NASDAQ:AMZN): Analysis of Solvency Ratios
. https://www.stock-analysis-on.net/NASDAQ/Company/Amazoncom-Inc/Ratios/Long-
term-
Debt-and-Solvency.
Staff, F. (2020, August 10).
Amazon.com: 2020 Fortune 500
. https://fortune.com/company/amazon-com/fortune500/.
Yahoo Finance. (2020, October 6).
Alibaba Group Holding Limited (BABA) Stock Historical Prices & Data
. Yahoo! Finance. https://finance.yahoo.com/quote/BABA/history?
period1=1570233600.
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