Amazon’s (AMZN) Potential Value

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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Amazon

Over the past 10-year Amazon (AMZN) has been able to grow its revenue by over 1000 percent, while its stock price has increased by over 1,300 percent. Over the trailing twelve months (TTM), AMZN has grown its revenue to around $142 billion, and its stock price has soared to just under $1000 per share.
AMZN Chart

data by YCharts

Growth as Percent
AMZN Chart

data by YCharts

Meanwhile, analyst estimates for revenue have been rising as well. With revenue estimates rising to around $238 billion in 2019.

Analyst Estimates
AMZN Chart

data by YCharts

While the stock trades at 3, 5, & 7-year average Price-to-Sales ratio of 2.43, 2.28, and 2.26 respectively.
AMZN Chart

data by YCharts

Based on a 2019 revenue of $238 billion, and a PS ratio of roughly 2.35, AMZN could be worth nearly $545 billion.
AMZN Market Cap Chart

N Market Cap data by YCharts

Based on 490 million diluted shares outstanding, the stock could be worth nearly $1,115 per share.
AMZN Average Diluted Shares Outstanding (Quarterly) Chart

AMZN Average Diluted Shares Outstanding (Quarterly) data by YCharts

AMZN Growth Potential

However, it is entirely possible that those estimates for revenue growth are too low. The chart below shows the plots and forecast based on historical revenue growth.

Amazon
Amazon Revenue Growth and Forecast

The forecasted revenue projects growth to exceed $275 million in 2019. Plotted against analyst estimates.

AMZN
Amazon Revenue Growth and Analyst Estimates

At around $275 billion in 2019 revenue, AMZN market cap at 2.35 times sales, could approach $646 billion or roughly $1320 per share.

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Michael Kramer and the clients of Mott Capital Management, LLC DO NOT own shares of AMZN.

Michael Kramer is the Founder and Portfolio Manager of Mott Capital Management, LLC a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

$amzn