Stock Report | June 08, 2024 | NasdaqGSSymbol: AMZN | AMZN is in the S&P 500

Amazon.com, Inc.
Recommendation Price 12-Mo. Target Price Report Currency Investment Style
BUY « « « « « USD 184.30 (as of market close Jun 07, 2024) USD 233.00 USD Large-Cap Growth
Equity Analyst Arun Sundaram, CFA, CPA

GICS Sector Consumer Discretionary Summary Amazon.com, Inc. is a leading global e-commerce retailer, as well as a major provider of
Sub-Industry Broadline Retail cloud computing services to companies, individuals, and governments.

Key Stock Statistics (Source: CFRA, S&P Global Market Intelligence (SPGMI), Company Reports)
52-Wk Range USD 191.7 - 118.35 Oper.EPS2024E USD 7.47 Market Capitalization[B] USD 1925.23 Beta 1.14
Trailing 12-Month EPS USD 3.57 Oper.EPS2025E USD 8.75 Yield [%] N/A 3-yr Proj. EPS CAGR[%] 53
Trailing 12-Month P/E 51.62 P/E on Oper.EPS2024E 24.67 Dividend Rate/Share N/A SPGMI's Quality Ranking B
USD 10K Invested 5 Yrs Ago 21,011.0 Common Shares Outstg.[M] 10,403.00 Trailing 12-Month Dividend N/A Institutional Ownership [%] 63.0

Price Performance Analyst's Risk Assessment

LOW MEDIUM HIGH

Our risk assessment reflects Amazon’s position as a global
leader in e-commerce and cloud computing services.
AMZN also has a diversified set of profit streams, derived
from both products (e.g., online stores and physical
stores) and services (e.g., advertising, fulfillment,
subscriptions, and Amazon Web Services [AWS]). AMZN
has what we view as a competitive edge due to its size and
scale; we note it spent about $53B in capital investments
in 2023 (up from $13B in 2018). Finally, its balance sheet
is strong with a net debt/adjusted EBITDA ratio of just 0.4x
as of 2023 ($87B in cash and marketable securities).

Revenue/Earnings Data

Revenue (Million USD)

1Q 2Q 3Q 4Q Year
2025 E 159,874 E 168,873 E 179,870 E 213,286 E 721,902
2024 143,313 E 151,520 E 161,345 E 191,559 E 647,738
Source: CFRA, S&P Global Market Intelligence
2023 127,358 134,383 143,083 169,961 574,785
Past performance is not an indication of future performance and should not be relied upon as such.
2022 116,444 121,234 127,101 149,204 513,983
Analysis prepared by Arun Sundaram, CFA, CPA on May 01, 2024 09:52 AM ET, when the stock traded at USD 181.13.
2021 95,504 102,945 112,435 139,146 451,254
2020 75,452 88,912 96,145 125,555 386,064
Highlights Investment Rationale/Risk
Earnings Per Share (USD)
u We forecast 13% revenue growth in 2024, u Our opinion is Buy, as AMZN remains a
broken up as follows: first-party online sales compelling and durable multi-year profit and 1Q 2Q 3Q 4Q Year
(+8% in 2024 vs. +5% in 2023), physical stores free cash flow story. With more efficiencies left 2025 E 1.92 E 2.06 E 2.24 E 2.53 E 8.75
(+5% vs. +6%), third-party seller services to be unlocked (e.g., inbound transportation, 2024 1.53 E 1.81 E 1.97 E 2.16 E 7.47
(+15% vs. +19%), subscription services (+11% emerging markets, Prime Video enhancements, 2023 0.74 1.24 1.32 1.51 4.82
vs. +14%), advertising services (+24% vs. and AWS leverage), along with faster growth in 2022 0.52 0.54 0.65 0.73 2.44
+24%), and AWS (+18% vs. +13%). On the higher-margin business streams like AWS, 2021 0.98 1.04 0.56 0.75 3.32
bottom line, we forecast operating income of third-party fulfillment, and advertising, we 2020 0.40 0.75 0.81 0.86 2.82
$70.5B in 2024 (10.9% margin), compared to believe there is operating profit upside over the Fiscal Year ended Dec 31. EPS Estimates based on CFRA's
$36.9B in 2023 (6.4% margin). next few years vs. the current consensus. Operating Earnings; historical earnings are adjusted. In periods
u In e-commerce, AMZN is making strides in Shares still look cheap trading at about 14x where a different currency has been reported, this has been
forward adjusted EBITDA vs. the 12x-30x adjusted to match the current quoted currency.
lowering its cost to serve (unit costs down
$0.45/unit in 2023), while also increasing Prime historical trading range.
Dividend Data
delivery speeds. In advertising, AMZN is u Risks to our opinion and target price include
capturing more digital-ad share, and we see legal and regulatory challenges (e.g., claims, No cash dividends have been paid in the last year.
this business nearly doubling by 2024 litigation, and government investigations), rising
compared to 2021 (to $58B from $31B). In competition in e-commerce and cloud services,
AWS, growth has begun to reaccelerate (was and overall challenging macroeconomic
+17% in Q1 vs. +13% in Q4), and we believe conditions.
2024 will mark a strong year for AWS, driven by u Our 12-month target price of $233 is calculated
the continued migration to the cloud and new using an EV/EBITDA multiple of 17x against our
opportunities in generative AI (e.g., chips, 2024 adjusted EBITDA estimate of $150.0B
foundational models, and AI applications). (+36% Y/Y). This multiple is more toward the
u We forecast free cash flow of $79B in 2024, up lower end of AMZN’s long-term trading range
from $37B in 2023, driven by operating income (12x-30x). We forecast adjusted EPS (removes
growth (+91% Y/Y) and improvements in stock comp and Rivian mark-to-market impact)
working capital, partially offset by an increase in of $7.47 in 2024 and $8.75 in 2025.
capex (about $64B vs. $53B in 2023).

Redistribution or reproduction is prohibited without written permission. Copyright ©2024 CFRA. This document is not intended to provide personal investment advice and it does not take into account the specific investment
objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek independent financial advice regarding the suitability and/or appropriateness of making an investment
or implementing the investment strategies discussed in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such investments, if any,
may fluctuate and that the value of such investments may rise or fall. Accordingly, investors may receive back less than they originally invested. Investors should seek advice concerning any impact this investment may have on
their personal tax position from their own tax advisor. Please note the publication date of this document. It may contain specific information that is no longer current and should not be used to make an investment decision. Unless
otherwise indicated, there is no intention to update this document.
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Stock Report | June 08, 2024 | NasdaqGSSymbol: AMZN | AMZN is in the S&P 500
Amazon.com, Inc.
Business Summary Apr 11, 2024 Corporate information

CORPORATE OVERVIEW. Since opening for business as “Earth’s Biggest Bookstore” in July 1995 and going Investor contact
public in 1997 at a split-adjusted stock price of $1.50 per share, Amazon.com has expanded into a number D. Fildes (206 266 1000)
of other product categories including apparel, shoes, and jewelry; electronics and computers; movies, music,
and games; toys, kids, and baby; sports and outdoors; home and garden; tools, auto, and industrial; grocery; Office
health and beauty; and digital downloads. 410 Terry Avenue North, Seattle, Washington, 98109-
Over the years, Amazon has expanded into several service offerings, including fulfillment, advertising, 5210
publishing, subscriptions (e.g., Amazon Prime membership), as well as its leading cloud computing business
Telephone
called Amazon Web Services (AWS). AWS offers a broad set of on-demand technology services, including
206 266 1000
compute, storage, database, analytics, and machine learning. Amazon now makes more money selling
services compared to products. Services made up 55% of total revenues in 2023, up from 53% in 2022, 49% Fax
in 2021, and 44% in 2020. N/A
In Amazon’s 2021 shareholder letter (released in April 2022), the company stated it had over 200 million
Website
Prime customers worldwide. We think Amazon could be approaching 300 million Prime customers, driven by
www.aboutamazon.com
international expansion. Amazon has not provided Prime customer figures since the 2021 shareholder letter.
The breakdown of 2023 net sales by reporting segments is as follows: North America (61%); International
Officers
(23%); and Amazon Web Services, or AWS (16%). The international segment was the only unprofitable
segment in 2023 (operating loss of $2.7 billion vs. operating loss of $7.7 billion in 2022), as AMZN is still in Founder & Executive President, CEO & Director
the early stages of its e-commerce business in many emerging markets (AMZN has launched in 10 Chairman A. R. Jassy
countries over the last seven years; it took about a decade to become profitable in the U.S.). North America J. P. Bezos
Senior VP & CFO
saw $14.9 billion in operating income in 2023, up from an operating loss of $2.9 billion in 2022. AWS saw VP, Worldwide Controller & B. T. Olsavsky
$24.6 billion in operating profit in 2023, up from $22.8 billion in 2022. Principal Accounting
The breakdown of 2023 revenues by channels is as follows: online stores, 40%; physical stores, 3%; third- Officer Senior VP of Global Public
party seller services, 24%; subscriptions services, 7%; advertising services, 8%; Amazon Web Services, 16%; S. L. Reynolds Policy & General Counsel
and other, 1%. D. A. Zapolsky
Chief Technology Officer
PRIMARY BUSINESS DYNAMICS. Amazon’s business is highly intensive in terms of operating and capital W. Vogels
expenditures. In 2023, Amazon pulled back on its capital investments ($53 billion vs. $64 billion in 2022).
Specifically, capital investments related to fulfillment and transportation were reined in since Amazon spent
a tremendous amount of money to establish its fulfillment network between 2020 and 2022. In fact, the Board Members
company essentially doubled its fulfillment network within an 18-month span between 2020 and 2022, A. R. Jassy J. J. Rubinstein
which is about the size of United Parcel Service, Inc. (UPS 148 ***). Capital investments related to Amazon A. Y. Ng J. P. Bezos
Web Services continues to increase as AMZN continues to build new data centers to support the ongoing
migration to the cloud. Going forward, Amazon plans to invest in technology related to artificial intelligence B. D. Smith J. S. Gorelick
and machine learning. D. P. Huttenlocher K. B. Alexander
M&A. In February 2023, Amazon acquired One Medical, a primary care provider, for about $3.9 billion. In E. W. Cooper P. Q. Stonesifer
March 2022, Amazon closed on its deal to acquire MGM Holdings Inc. (MGM) for $8.45 billion, its second I. K. Nooyi W. P. Weeks
largest acquisition ever. Amazon’s largest acquisition was Whole Foods (a leading retailer of natural and
organic foods) in August 2017 for $13.7 billion in cash. In June 2020, it acquired Zoox, a start-up provider of
autonomous vehicles, for about $1.2 billion. In September 2018, the company acquired PillPack, an online Domicile Auditor
pharmacy company, for about $753 million. In February 2018, Amazon acquired Ring, a start-up provider of Delaware Ernst & Young LLP
smart home technology applications, for about $839 million.
Founded
KEY DEVELOPMENTS. In September 2023, the FTC filed a much-anticipated lawsuit against Amazon, alleging 1994
that the company is a monopolist using anticompetitive and unfair strategies to stifle competition, penalize
third-party sellers, and maintain high prices for consumers. The FTC, under the leadership of Lina Khan, has Employees
not shied away from undertaking challenging cases, even when the odds of success are low (e.g., the 1,525,000
Microsoft takeover of Activision Blizzard). We don’t see major structural changes to Amazon as a result of
this lawsuit. Stockholders
11,656
Amazon has partnered with Rivian Automotive, an electric vehicle manufacturer, to add electric delivery
vehicles. Amazon plans to have 100,000 electric delivery vehicles from Rivian on the road by 2030. As of
December 31, 2023, Amazon held 158 million shares of Rivian’s Class A common stock, representing about
16% ownership interest and 15% voting interest. The fair value of Amazon’s investment in Rivian was $3.7
billion as of 2023, up from $2.9 billion as of 2022 but down from $15.6 billion as of 2021.
AMZN shares were added to the Dow Jones Industrial Average (DJIA) on February 26, 2024.
FINANCIAL TRENDS. Revenues grew 12% in 2023 vs. 9% in 2022, 22% in 2021, 38% in 2020, and 21% in
2019. On a four-year compounded annual growth rate (between 2019 and 2023), revenue grew about 20%,
led by advertising (+38%), followed by AWS (+27%), third-party seller services (+27%), subscription services
(+20%), and first-party online stores (+13%).
Operating income was $36.9 billion as of 2023 (6.4% margin), up from $12.2 billion as of 2022 (2.4%
margin). North America margins were 4.2% in 2023 vs. -0.9% in 2022. International margins were -2.0% in
2023 vs. -6.6% in 2022. AWS margins were 27.1% in 2023 vs. 28.5% in 2022.
Amazon had about $87 billion in cash and marketable securities as of 2023, up from $70 billion in 2022. The
company did not repurchase any common shares in 2023, following about $6.0 billion of share repurchases
in 2022. As of December 31, 2023, Amazon had $6.1 billion remaining under its repurchase program.
Amazon has never declared or paid cash dividends. However, we believe AMZN could pay a dividend in the
coming years given significant improvement in free cash flow.

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Stock Report | June 08, 2024 | NasdaqGSSymbol: AMZN | AMZN is in the S&P 500
Amazon.com, Inc.
Quantitative Evaluations Expanded Ratio Analysis

Fair Value Rank 1 2 3 4 5 2023 2022 2021 2020

Lowest Highest Price/Sales 2.77 1.67 3.65 4.30
Based on CFRA's proprietary quantitative model, Price/EBITDA 18.64 15.49 28.94 34.54
stocks are ranked from most overvalued (1) to most Price/Pretax Income 42.46 NM 44.99 68.64
undervalued (5). P/E Ratio 52.39 NM 51.45 77.86
Avg. Diluted Shares Outstg. (M) 10,492 10,189 10,296 10,198
Fair Value USD Analysis of the stock’s current worth, based on CFRA’s
Calculation 156.86 proprietary quantitative model suggests that AMZN is Figures based on fiscal year-end price
overvalued by USD 27.44 or 14.89%

Volatility LOW AVERAGE HIGH

Key Growth Rates and Averages
Technical NEUTRAL Since June, 2024, the technical indicators for AMZN
Past Growth Rate (%) 1 Year 3 Years 5 Years
Evaluation have been NEUTRAL"
Net Income NM 12.57 24.74
Insider Activity UNFAVORABLE NEUTRAL FAVORABLE Sales 11.83 14.19 19.80

Ratio Analysis (Annual Avg.)

Net Margin (%) 5.29 3.96 4.30
% LT Debt to Capitalization 17.86 20.33 19.11
Return on Equity (%) 17.49 14.79 18.75

Company Financials Fiscal year ending Dec 31

Per Share Data (USD) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Tangible Book Value 16.51 11.68 11.57 7.30 4.34 2.53 1.14 1.54 0.92 0.72
Free Cash Flow 3.13 -1.66 -1.46 2.59 2.19 1.78 0.67 0.99 0.71 0.21
Earnings 2.90 -0.27 3.24 2.09 1.15 1.01 0.31 0.24 0.06 -0.03
Earnings (Normalized) 2.90 -0.27 3.24 2.09 1.15 1.01 0.23 0.24 0.06 -0.03
Dividends N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Payout Ratio (%) NM NM NM NM NM NM NM NM NM NM
Prices: High 155.63 171.40 188.65 177.61 101.79 102.52 60.67 42.36 34.82 20.40
Prices: Low 81.43 81.69 144.05 81.30 73.05 58.53 37.38 23.70 14.26 14.20
P/E Ratio: High 53.70 NM 58.20 84.90 88.50 NM NM NM NM NM
P/E Ratio: Low 28.10 NM 44.50 38.90 63.50 58.10 NM 96.70 NM NM

Income Statement Analysis (Million USD)

Revenue 574,785 513,983 469,822 386,064 280,522 232,887 177,866 135,987 107,006 88,988
Operating Income 36,852 13,348 24,879 22,899 14,541 12,421 4,106 4,186 2,233 178.00
Depreciation + Amortization 48,663 41,921 34,433 25,180 21,789 15,341 11,478 8,116 5,646 4,187
Interest Expense 3,182 2,367 1,809 1,647 1,600 1,417 848.00 484.00 459.00 210.00
Pretax Income 37,545 -5,939 38,155 24,194 13,962 11,270 3,802 3,796 1,546 -74.00
Effective Tax Rate 19.00 54.20 12.60 11.80 17.00 10.60 20.20 37.50 61.40 -225.70
Net Income 30,425 NM 33,364 21,331 11,588 10,073 3,033 2,371 596.00 NM
Net Income (Normalized) 22,809 6,929 14,655 13,625 8,510 7,040 2,301 2,335 969.40 NM

Balance Sheet and Other Financial Data (Million USD)

Cash 86,780 70,026 96,049 84,396 55,021 41,250 30,986 25,981 19,808 17,416
Current Assets 172,351 146,791 161,580 132,733 96,334 75,101 60,197 45,781 35,705 31,327
Total Assets 527,854 462,675 420,549 321,195 225,248 162,648 131,310 83,402 64,747 54,505
Current Liabilities 164,917 155,393 142,266 126,385 87,812 68,391 57,883 43,816 33,887 28,089
Long Term Debt 64,914 73,850 54,944 35,216 23,414 23,495 24,743 7,694 8,227 8,265
Total Capital 363,449 315,981 278,002 198,144 139,593 78,065 71,817 39,698 30,896 24,750
Capital Expenditures 52,729 63,645 61,053 40,140 16,861 13,427 11,955 7,804 5,387 4,893
Cash from Operations 84,946 46,752 46,327 66,064 38,514 30,723 18,365 17,203 12,039 6,842
Current Ratio 1.05 0.94 1.14 1.05 1.10 1.10 1.04 1.04 1.05 1.12
% Long Term Debt of Capitalization 17.90 23.40 19.80 17.80 16.80 30.10 34.50 19.40 26.60 33.40
% Net Income of Revenue 5.30 -0.50 7.10 5.50 4.10 4.30 1.70 1.70 0.60 -0.30
% Return on Assets 4.65 1.89 4.19 5.24 4.69 5.28 2.39 3.53 2.34 0.24
% Return on Equity 17.50 -1.90 28.80 27.40 21.90 28.30 12.90 14.50 4.90 -2.40

Source: S&P Global Market Intelligence. Data may be preliminary or restated; before results of discontinued operations/special items. Per share data adjusted for stock dividends; EPS diluted.
E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked. UR-Under Review.

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Stock Report | June 08, 2024 | NasdaqGSSymbol: AMZN | AMZN is in the S&P 500
Amazon.com, Inc.
Sub-Industry Outlook Industry Performance

CFRA has a neutral 12-month fundamental figure of about 2.0 million to 2.5 million jobs GICS Sector: Consumer Discretionary
outlook for the Broadline Retail sub-industry. added per year. There are also about 8.8 million Sub-Industry: Broadline Retail
Per the U.S. Census Bureau, retail sales (ex-auto job openings in the country (as of February Based on S&P 1500 Indexes
and gas) grew 0.6% M/M in February 2024 after 2024), above the pre-pandemic range of about Five-Year market price performance through Jun 08, 2024
falling 1.0% M/M in January 2024. While January 6.0 million to 7.0 million job openings. The
retail sales were disappointing, the miss can be unemployment rate was 3.9% as of February
attributed to adverse weather in many parts of the 2024, only slightly above the pre-pandemic
country, along with seasonality adjustments unemployment rate of 3.5%. Most importantly,
coming out of the holiday season. February retail average hourly earnings have been strong (up
sales recovered from January but still fell slightly about 4.3% Y/Y as of February 2024; above
short of expectations. headline CPI for 10 consecutive months).
Consumer sentiment and confidence can be a Consumers still have some excess savings
leading indicator of consumer spending. from the pandemic, which can help fuel
Consumer sentiment stood at 79.4 as of March spending this year. We estimate pandemic-era
2024, up from 69.7 as of December 2023 but excess savings peaked in August 2021 at about
below the 101.0 measure taken just prior to the $2.0 trillion. These savings have been depleting
pandemic. Consumer confidence stood at 104.8 since then and now stand at about $200 billion,
as of March 2024, down from 108.0 as of by our estimates. At the current run-rate, we
December 2023 and below the 132.6 measure estimate these savings being fully depleted by
taken just prior to the pandemic. the end of 2024.
Gas prices can directly impact consumer The Broadline Retail sub-industry is a new GICS
sentiment and spending. As of March 2024, the classification created in March 2023. General
national retail price for regular gasoline was about Merchandise Stores and Department Stores
$3.50/gallon, essentially flat Y/Y but up from were merged into Broadline Retail, which also
about $3.05/gallon at the start of the year. We includes certain retailers from the now
note consumer sentiment hit a record low in June discontinued Internet & Direct Marketing Retail
2022 when the national retail price for regular sub-industry (e.g., AMZN, EBAY, and ETSY).
gasoline hit $5.00/gallon. Year-to-date through March 28, 2024, the sub-
We expect rising household debt to negatively industry advanced 18.4% compared to the
impact consumer spending in 2024. Based on 5.3% increase in the Consumer Discretionary
data from the New York Federal Reserve, total U.S. sector and the 9.9% advance to the S&P 1500.
household debt stood at about $17.5 trillion as of / Arun Sundaram, CFA, CPA NOTE: A sector chart appears when the sub-industry does not have
2023, the highest on record. Credit card debt has sufficient historical index data.
been rising at a faster rate, hitting $1.13 trillion as All Sector & Sub-Industry information is based on the Global Industry
of 2023, up from $1.00 trillion as of 2022, $860 Classification Standard (GICS).
billion as of 2021, and $820 billion as of 2020. We Past performance is not an indication of future performance and should
note a record 8.5% of credit card balances moved not be relied upon as such.
into delinquency status during the final three Source: CFRA, S&P Global Market Intelligence
months of 2023. The recent resumption of federal
student loan repayments could drive credit card
delinquency rates even higher in 2024.
A strong labor market should support consumer
spending in 2024. We note 3.0 million jobs were
added in 2023, which is above the pre-pandemic

Sub-Industry: Broadline Retail Peer Group*: Broadline Retail

Recent 30-Day 1-Year Fair Return
Stock Stock Stk. Mkt. Price Price P/E Value Yield on Equity LTD to
Peer Group Symbol Exchange Currency Price Cap. (M) Chg. (%) Chg. (%) Ratio Calc. (%) (%) Cap (%)

Amazon.com, Inc. AMZN NasdaqGS USD 185.00 1,925,226.0 -2.0 52.6 52.0 156.86 N/A 20.3 17.0
Alibaba Group Holding Limited BABA NYSE USD 80.01 193,479.0 0.8 -6.2 N/A N/A 1.2 6.4 10.8
Coupang, Inc. CPNG NYSE USD 21.89 39,139.0 -7.4 37.8 31.0 N/A N/A 36.8 13.6
Dillard's, Inc. DDS NYSE USD 428.17 6,936.0 -1.4 28.8 10.0 429.74 0.2 40.3 21.4
Dollarama Inc. DOL TSX CAD 126.72 35,171.0 46.4 104.4 36.0 74.03 0.3 493.8 47.6
Etsy, Inc. ETSY NasdaqGS USD 66.22 7,743.0 5.5 -24.4 14.0 49.82 N/A -52.7 126.6
JD.com, Inc. JD NasdaqGS USD 29.77 45,457.0 -7.4 -19.4 9.0 N/A 2.5 8.7 11.9
MercadoLibre, Inc. MELI NasdaqGS USD 1,621.09 82,185.0 -4.0 34.2 73.0 N/A N/A 41.6 24.7
PDD Holdings Inc. PDD NasdaqGS USD 143.83 199,747.0 4.5 98.4 17.0 322.62 N/A 46.3 2.3
Vipshop Holdings Limited VIPS NYSE USD 16.30 8,841.0 4.2 -2.7 7.0 24.62 2.5 23.9 N/A
eBay Inc. EBAY NasdaqGS USD 53.39 27,039.0 6.6 18.5 12.0 69.12 2.0 45.4 42.6

*For Peer Groups with more than 10 companies or stocks, selection of issues is based on market capitalization.
NA-Not Available; NM-Not Meaningful.
Note: Peers are selected based on Global Industry Classification Standards and market capitalization. The peer group list includes companies with similar characteristics, but may not include all the companies within the same
industry and/or that engage in the same line of business.

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Stock Report | June 08, 2024 | NasdaqGSSymbol: AMZN | AMZN is in the S&P 500
Amazon.com, Inc.
Analyst Research Notes and other Company News

April 30, 2024 February 02, 2024

09:26 PM ET... CFRA Reiterates Buy Opinion on Shares of Amazon.com, Inc. (AMZN 12:51 AM ET... CFRA Reiterates Buy Opinion on Shares of Amazon.com, Inc. (AMZN
177.16****): 170.64****):
Our 12-month target of $233, up $12, is calculated using an EV/EBITDA multiple of We lift our 12-month target by $18 to $198, calculated using an EV/EBITDA multiple
17x from our 2024 adj-EBITDA estimate of $150.0 billion (up from $141.8 billion) vs. of 16x (was 15x) against our 2024 adj-EBITDA of $137.0B (up from $132.3B) vs.
12x-30x historical average. We lift our 2024 adj-EPS (excludes Rivian valuation and 12x-30x historical range. We lift our 2024 adj-EPS to $6.45 from $6.13 but lower
stock-based comp) to $7.47 from $6.85 and 2025’s to $8.75 from $8.53. Q1 our 2025 adj-EPS to $7.18 from $7.28. Q4 operating income of $13.2B smashed the
revenue of $143.3 billion (+12.5% Y/Y) beat by $764 million, with operating income $10.4B consensus on revenue of $170.0B (+14% Y/Y), $3.7B above consensus. AWS
of $15.3 billion (+221% Y/Y), $4.3 billion or 39% above consensus. AWS grew a growth reaccelerated to +13% (approaching a $100B annualized run-rate business)
staggering 17% Y/Y and is now a $100 billion run-rate business, of which AI vs. +12% in Q3/Q2, a trend that should continue in 2024 due to easier Y/Y comps
represents just a few billion dollars today. Advertising grew a solid 24% Y/Y. We and new AI opportunities. In retail, lower transportation costs and AMZN’s supply
wouldn’t look too much into the cautious Q2 guidance, as AMZN is notorious for chain regionalization initiative drove strong margins all year. We expect retail
conservative guidance. We’re also not worried about the expected step up in capex margins to continue to expand in 2024, albeit at a slower pace vs. 2023. Advertising
this year (we estimate capex up 22% to $64 billion), as AMZN should still be able to should continue to see strong growth in 2024 (+27% in Q4), buoyed by the recent
grow operating margins while also reinvesting in its business. We see $79 billion in introduction of ads to Prime Video. One yellow flag to call out is the start of a new
FCF in 2024 vs. $62 billion consensus. / Arun Sundaram, CFA, CPA capex cycle in 2024, driven by AI investments. / Arun Sundaram, CFA, CPA

April 11, 2024 October 27, 2023

11:41 AM ET... CFRA Reiterates Buy Opinion on Shares of Amazon.com, Inc. (AMZN 12:58 AM ET... CFRA Reiterates Buy Opinion on Shares of Amazon.com, Inc. (AMZN
187.00****): 125.98****):
We lift our 12-month target from $198 to $221, calculated using an EV/EBITDA We trim our 12-month target by $3 to $180, calculated using an EV/EBITDA multiple
multiple of 17x (was 16x) against our 2024 adj-EBITDA of $141.8B (up from of 15x (was 17x) against our ‘24 adj-EBITDA estimate of $132.3B (up from $115.0B)
$137.0B) vs. the 12x-30x historical range. We lift our 2024 adj-EPS estimate to vs. 12x-30x historical average. We lift our ’23 EPS to $4.62 from $4.42 and ’24 EPS
$6.85 from $6.45 and 2025’s to $8.53 from $7.18. Our upwardly revised estimates to $6.13 from $4.66. We begin ’25 at $7.28. Q3 GAAP operating income of $11.2B
reflect margin expansion opportunities in 2024, driven by continued retail smashed the $7.7B estimate, as AWS margins hit 30.3% (+600 bps from Q2).
efficiencies (e.g., supply chain regionalization benefits), AWS growth reacceleration Revenue of $143.1B (+13% Y/Y) smashed the $141.6B consensus. Yet, AWS growth
(e.g., GenAI investments), and robust advertising growth (e.g., Prime Video ads was 12% Y/Y (flat from Q2), which was in line with consensus but will be viewed as a
introduced in January). We see GAAP operating margins rising from 6.4% in 2023 to slight disappointment considering MSFT Azure’s reacceleration in the Sep-Q. AWS
9.4% in 2024, above the current 8.5% consensus, with free cash flow likely could still accelerate in Q4, as AMZN notes several new deals were signed in
exceeding $70B (up from $37B in 2023). Risks include a slower consumer spending September with an October effective date. Our takeaway was that AWS deal volume
environment and lumpy AWS growth, noting AWS deal volume can be volatile Q/Q. will be lumpy Q/Q, especially since most companies are still in the idea generation
AWS growth reaccelerated Y/Y in Q4 2024 to 13% (from 12% in Q3 and Q2). phase of GenAI adoption. Q4 guidance was mixed, as a better-than-expected profit
Investors will likely be looking for 14%+ Y/Y AWS growth in Q1 2024. We remain at outlook was offset by a weaker-than-expected sales outlook. / Arun Sundaram, CFA,
Buy. / Arun Sundaram, CFA, CPA CPA

March 27, 2024 September 26, 2023

04:53 PM ET... CFRA Keeps Buy Opinion on Shares of Amazon.com, Inc. (AMZN 03:31 PM ET... CFRA Keeps Buy Opinion on Shares of Amazon.com, Inc. (AMZN
179.83****): 125.80****):
Today, AMZN raised its investment in AI startup Anthropic by $2.75 billion, bringing Today, the FTC filed a much-anticipated lawsuit against Amazon, alleging that the
its total stake to $4 billion after an initial $1.25 billion investment last September. As company is a monopolist using anticompetitive and unfair strategies to stifle
part of this partnership, Anthropic will use Amazon Web Services (AWS) as its competition, penalize third-party sellers, and maintain high prices for consumers.
primary cloud provider and leverage AWS's Trainium and Inferentia chips to build, This marks the fourth FTC lawsuit against Amazon this year and the latest in a series
train, and deploy future foundational AI models. These models are now available on targeting Big Tech companies. The FTC, under the leadership of Lina Khan, has not
Amazon's Bedrock platform, which also hosts large language models from other shied away from undertaking challenging cases, even when the odds of success are
major AI companies like AI21 Labs, Cohere, Meta, Mistral AI, and Stability AI, as well low (e.g., the Microsoft takeover of Activision Blizzard). Our immediate reaction to
as Amazon's own models. Earlier this month, Anthropic released the Claude 3 model this lawsuit is that it will be a lengthy and uphill battle for the FTC. We see evidence
family, which includes Claude 3 Haiku, Claude 3 Sonnet, and Claude 3 Opus. Claude 3 to suggest online marketplaces in the U.S. are competitive, with the recent success
Opus is the most intelligent chatbot of the model family and seems to be on par or of Walmart’s third-party marketplace as an example. Additionally, the FTC could
even better than OpenAI’s GPT-4, especially in the areas of reasoning, math, and have a tough time defending its stance that Amazon’s current business practices
coding. We see today’s investment as AMZN’s latest commitment to being a leading are harmful to consumers. Overall, we see low risk of major structural changes at
generative AI company. / Arun Sundaram, CFA, CPA Amazon. We keep a Buy opinion. / Arun Sundaram, CFA, CPA

February 21, 2024

12:09 PM ET... CFRA Keeps Buy Opinion on Shares of Amazon.com, Inc. (AMZN
168.10****):
AMZN will replace WBA in the Dow Jones Industrial Average (DJIA) effective February
26, 2024. The index change was prompted by WMT’s decision to split its stock 3:1,
which will reduce WMT’s index weight due to the price-weighted construction of the
DJIA. By replacing WBA, the DJIA will increase its exposure to consumer retail,
advertising, and cloud computing. AMZN will join MSFT and AAPL as the other
Magnificent 7 stocks in the index, which together will comprise about 13% of the
DJIA. By weighting, AMZN will rank 17th in the index, while MSFT is 2nd and AAPL is
15th. Our opinion on AMZN shares is Buy, as we believe 2024 will mark the second
consecutive year of margin expansion and free cash flow growth, driven by
additional retail efficiencies, growth re-acceleration in AWS, and advertising growth
(e.g., Prime Video ads). AMZN shares are up about 80% over the last year, but still
look undervalued, in our view, trading at a forward EV/EBITDA multiple of just 14x vs.
the 12x-30x historical average. / Arun Sundaram, CFA, CPA

Note: Research notes reflect CFRA's published opinions and analysis on the stock at the time the note was published. The note reflects the views of the equity analyst as of
the date and time indicated in the note, and may not reflect CFRA's current view on the company.
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Stock Report | June 08, 2024 | NasdaqGSSymbol: AMZN | AMZN is in the S&P 500
Amazon.com, Inc.
Analysts Recommendations Wall Street Consensus Opinion

Buy

Wall Street Consensus vs. Performance

For fiscal year 2024, analysts estimate that AMZN will earn
USD 4.53. For fiscal year 2025, analysts estimate that
AMZN's earnings per share will grow by 26.13% to USD
5.72.

No. of
Recommendations % of Total 1 Mo.Prior 3 Mos.Prior
Buy 43 68 43 45
Buy/Hold 14 22 14 14
Hold 2 3 2 2
Weak hold 0 0 0 0
Sell 0 0 0 0
No Opinion 4 6 4 5
Total 63 100 63 66

Wall Street Consensus Estimates

Fiscal Year Avg Est. High Est. Low Est. # of Est. Est. P/E
2025 5.72 6.72 4.61 50 32.35
2024 4.53 5.41 3.74 49 40.81
2025 vs. 2024 p 26% p 24% p 23% p 2% q -21%

Q2'25 1.22 1.38 1.09 12 151.95

Q2'24 1.01 1.19 0.78 36 183.06
Q2'25 vs. Q2'24 p 20% p 16% p 40% q -67% q -17%
Forecasts are not reliable indicator of future performance.
Note: A company's earnings outlook plays a major part in any investment decision. S&P Global Market Intelligence organizes the earnings estimates of over 2,300 Wall Street analysts, and
provides their consensus of earnings over the next two years, as well as how those earnings estimates have changed over time. Note that the information provided in relation to consensus
estimates is not intended to predict actual results and should not be taken as a reliable indicator of future performance.
Note: For all tables, graphs and charts in this report that do not cite any reference or source, the source is S&P Global Market Intelligence.

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Stock Report | June 08, 2024 | NasdaqGSSymbol: AMZN | AMZN is in the S&P 500
Amazon.com, Inc.
Glossary

STARS Abbreviations Used in Equity Research Reports

Since January 1, 1987, CFRA Equity and Fund Research Services, and its CAGR - Compound Annual Growth Rate
predecessor S&P Capital IQ Equity Research has ranked a universe of U.S. CAPEX - Capital Expenditures
common stocks, ADRs (American Depositary Receipts), and ADSs (American CY - Calendar Year
Depositary Shares) based on a given equity's potential for future performance. DCF - Discounted Cash Flow
Similarly, we have ranked Asian and European equities since June 30, 2002. DDM - Dividend Discount Model
Under proprietary STARS (Stock Appreciation Ranking System), equity analysts EBIT - Earnings Before Interest and Taxes
rank equities according to their individual forecast of an equity's future total EBITDA - Earnings Before Interest, Taxes, Depreciation & Amortization
return potential versus the expected total return of a relevant benchmark (e.g., EPS - Earnings Per Share
a regional index (MSCI AC Asia Pacific Index, MSCI AC Europe Index or S&P 500® EV - Enterprise Value
Index)), based on a 12-month time horizon. STARS was designed to help FCF - Free Cash Flow
investors looking to put their investment decisions in perspective. Data used to FFO - Funds From Operations
assist in determining the STARS ranking may be the result of the analyst's own FY - Fiscal Year
models as well as internal proprietary models resulting from dynamic data P/E - Price/Earnings
inputs. P/NAV - Price to Net Asset Value
PEG Ratio - P/E-to-Growth Ratio
S&P Global Market Intelligence's Quality Ranking PV - Present Value
(also known as S&P Capital IQ Earnings & Dividend Rankings) - Growth and R&D - Research & Development
S&P Capital IQ Earnings & Dividend Rankings stability of earnings and dividends ROCE - Return on Capital Employed
are deemed key elements in establishing S&P Global Market Intelligence's ROE Return on Equity
earnings and dividend rankings for common stocks, which are designed to ROI - Return on Investment
capsulize the nature of this record in a single symbol. It should be noted, ROIC - Return on Invested Capital
however, that the process also takes into consideration certain adjustments ROA - Return on Assets
and modifications deemed desirable in establishing such rankings. The final SG&A - Selling, General & Administrative Expenses
score for each stock is measured against a scoring matrix determined by SOTP - Sum-of-The-Parts
analysis of the scores of a large and representative sample of stocks. The range WACC - Weighted Average Cost of Capital
of scores in the array of this sample has been aligned with the following ladder
of rankings: Dividends on American Depository Receipts (ADRs) and American Depository
Shares (ADSs) are net of taxes (paid in the country of origin).
A+ Highest B Below Average
Qualitative Risk Assessment
A High B- Lower
A Above C Lowest
Reflects an equity analyst's view of a given company's operational risk, or the
risk of a firm's ability to continue as an ongoing concern. The Qualitative Risk
B+ Average D In Reorganization
Assessment is a relative ranking to the U.S. STARS universe, and should be
NC Not Ranked reflective of risk factors related to a company's operations, as opposed to risk
and volatility measures associated with share prices. For an ETF this reflects on
EPS Estimates a capitalization-weighted basis, the average qualitative risk assessment
CFRA's earnings per share (EPS) estimates reflect analyst projections of future assigned to holdings of the fund.
EPS from continuing operations, and generally exclude various items that are
viewed as special, non-recurring, or extraordinary. Also, EPS estimates reflect STARS Ranking system and definition:
either forecasts of equity analysts; or, the consensus (average) EPS estimate, ««««« 5-STARS (Strong Buy):
which are independently compiled by S&P Global Market Intelligence, a data Total return is expected to outperform the total return of a relevant benchmark,
provider to CFRA. Among the items typically excluded from EPS estimates are by a notable margin over the coming 12 months, with shares rising in price on
asset sale gains; impairment, restructuring or merger-related charges; legal an absolute basis.
and insurance settlements; in process research and development expenses; ««««« 4-STARS (Buy):
gains or losses on the extinguishment of debt; the cumulative effect of Total return is expected to outperform the total return of a relevant benchmark
accounting changes; and earnings related to operations that have been over the coming 12 months.
classified by the company as discontinued. The inclusion of some items, such
as stock option expense and recurring types of other charges, may vary, and ««««« 3-STARS (Hold):
depend on such factors as industry practice, analyst judgment, and the extent Total return is expected to closely approximate the total return of a relevant
to which some types of data is disclosed by companies. benchmark over the coming 12 months.
««««« 2-STARS (Sell):
12-Month Target Price Total return is expected to underperform the total return of a relevant
The equity analyst's projection of the market price a given security will benchmark over the coming 12 months.
command 12 months hence, based on a combination of intrinsic, relative, and
««««« 1-STAR (Strong Sell):
private market valuation metrics.
Total return is expected to underperform the total return of a relevant
benchmark by a notable margin over the coming 12 months, with shares falling
in price on an absolute basis.
Relevant benchmarks:
In North America, the relevant benchmark is the S&P 500 Index, in Europe and
in Asia, the relevant benchmarks are the MSCI AC Europe Index and the MSCI AC
Asia Pacific Index, respectively.

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Stock Report | June 08, 2024 | NasdaqGSSymbol: AMZN | AMZN is in the S&P 500
Amazon.com, Inc.
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Amazon.com, Inc.
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