Amazon.com, Inc. - Revision history

>Samhulse1234: /* Ecommerce Trends */

2023-09-08T11:40:32Z

Ecommerce Trends

@@ Line 171: / Line 171: @@
 == Ecommerce Trends ==
 Global eccomerce sales will reach $5.8 trillion in 2023, reaching $8 trillion in 2027 (https://www.shopify.com/uk/blog/global-ecommerce-sales). Between 2023 and 2028 the average annual growth rate of ecommerce sales will be 8.62% (https://www.oberlo.com/statistics/global-ecommerce-sales-growth). This growth is being supported by mobile use for online shopping. Mobile ecommerce is expected to 42.9% of ecommerce sales by 2024.
 === Smart speaker market share (2020) ===

>Samhulse1234 at 09:26, 6 September 2023

2023-09-06T09:26:28Z

← Older revision		Revision as of 10:26, 6 September 2023
Line 168:		Line 168:
	\|150 mln sq ft		\|150 mln sq ft
	\|}		\|}

			== Ecommerce Trends ==
			Global eccomerce sales will reach $5.8 trillion in 2023, reaching $8 trillion in 2027 (https://www.shopify.com/uk/blog/global-ecommerce-sales). Between 2023 and 2028 the average annual growth rate of ecommerce sales will be 8.62% (https://www.oberlo.com/statistics/global-ecommerce-sales-growth). This growth is being supported by mobile use for online shopping. Mobile ecommerce is expected to 42.9% of ecommerce sales by 2024.

	=== Smart speaker market share (2020) ===		=== Smart speaker market share (2020) ===

>Samhulse1234: /* E-commerce Retail */

2023-09-05T11:21:40Z

E-commerce Retail

← Older revision		Revision as of 12:21, 5 September 2023
Line 116:		Line 116:

	=== E-commerce Retail ===		=== E-commerce Retail ===
	Amazon's core business lies in e-commerce retail, encompassing the sales of a diverse array of consumer goods via its eponymous online platform. This includes a vast assortment of items such as electronics, books, clothing, and home goods. In 2022, Amazon's online storefronts achieved an impressive revenue of $220 billion. <!-- The word 'impressive' is a relative term. Impressive how? -->		Amazon's core business lies in e-commerce retail, encompassing the sales of a diverse array of consumer goods via its eponymous online platform. This includes a vast assortment of items such as electronics, books, clothing, and home goods. In 2022, Amazon's online storefronts achieved an impressive revenue of $220 billion. This accounts for 42% of the company's income which is basically a fee from 3rd party retailers selling their products on amaozn. <!-- The word 'impressive' is a relative term. Impressive how? -->

	=== Physical stores ===		=== Physical stores ===

>Samhulse1234 at 11:18, 5 September 2023

2023-09-05T11:18:43Z

← Older revision		Revision as of 12:18, 5 September 2023
Line 44:		Line 44:
	}}		}}

	Amazon's mission is to be the most customer-centric company, the best employer, and the safest workplace on Earth.		== Amazon's mission is to be the most customer-centric company, the best employer, and the safest workplace on Earth. ==

	The company prioritises customer satisfaction and employee well-being, guided by principles such as customer obsession, passion for invention, operational excellence, and long-term thinking. Amazon operates in various segments, including e-commerce, cloud computing services (Amazon Web Services), digital content, logistics and delivery, smart home devices, grocery and food delivery, healthcare, entertainment and media, advertising, and consumer electronics.		The company prioritises customer satisfaction and employee well-being, guided by principles such as customer obsession, passion for invention, operational excellence, and long-term thinking. Amazon operates in various segments, including e-commerce, cloud computing services (Amazon Web Services), digital content, logistics and delivery, smart home devices, grocery and food delivery, healthcare, entertainment and media, advertising, and consumer electronics.

95.149.161.164 at 22:44, 17 July 2023

2023-07-17T22:44:49Z

Show changes

>Vraj Agarwal: Relative Valuation

2023-07-15T19:07:58Z

Relative Valuation

Show changes

>Vraj Agarwal: /* Relative Valuation */

2023-07-15T10:48:38Z

Relative Valuation

@@ Line 1,390: / Line 1,390: @@
 The table provides a brief analysis of the ratios and market cap of the 15 companies in the analysis including their minimum/maximum, median, quartile and mean values.
 The median EV/EBITDA obtained for the set of 17 companies in the analysis is 12.7, which results in a relatively valued share price of $103.55. The mean EV/Revenue ratio in the industry is 1.7 which results in a relatively valued share price of $97.21.
 == Appendix ==

>Vraj Agarwal: Reasoning estimates

2023-07-15T09:01:03Z

Reasoning estimates

← Older revision		Revision as of 10:01, 15 July 2023
Line 1,098:		Line 1,098:
	\| colspan="11" \|		\| colspan="11" \|
	\|}		\|}
	Sources suggest a terminal growth rate within the 3-5% range. The DCF model employs an ~~average~~ estimate of 3%, but the full range is accommodated in the sensitivity analysis. This figure is used in calculating the terminal value, which, when discounted, results in a present terminal value of approximately $1.199 trillion.		Sources suggest a terminal growth rate within the 3-5% range<ref name=":2">https://valueinvesting.io/AMZN/valuation/dcf-growth-exit-5y</ref>. The DCF model employs an estimate of 3%, but the full range is accommodated in the sensitivity analysis. This figure is used in calculating the terminal value, which, when discounted, results in a present terminal value of approximately $1.199 trillion.

	In calculating the DCF that forecasts the financial trajectory of a US-based company over the next five years, the risk-free rate is pegged at the US 5-year Treasury rate of 3.87%. This figure represents the monthly average rate spanning from January to July 2023.		In calculating the DCF that forecasts the financial trajectory of a US-based company over the next five years, the risk-free rate is pegged at the US 5-year Treasury rate of 3.87%<ref name=":3">https://www.cnbc.com/quotes/US5Y</ref>. This figure represents the monthly average rate spanning from January to July 2023.

	The summarised estimates from the DCF analysis can be found in the table below.		The summarised estimates from the DCF analysis can be found in the table below.
Line 1,106:		Line 1,106:
	!Input name		!Input name
	!Input value		!Input value
			!Reasons
	\|-		\|-
	\|Risk free rate		\|Risk free rate
	\|3.87%		\|3.87%
			\|US 5 year Treasury note rate <ref name=":3" />
	\|-		\|-
	\|Market risk premium		\|Market risk premium
	\|4.70%		\|4.70%
			\|Analysts expectations <ref name=":4" />
	\|-		\|-
	\|Levered beta		\|Levered beta
	\|0.88		\|0.88
			\|Analysts expectations <ref name=":5" />
	\|-		\|-
	\|Cost of equity		\|Cost of equity
	\|8.01%		\|8.01%
			\|CAPM model
	\|-		\|-
	\|Cost of debt		\|Cost of debt
	\|5.25%		\|5.25%
			\|US typical debt rate <ref name=":6" />
	\|-		\|-
	\|Internally calculated WACC		\|Internally calculated WACC
	\|7.74%		\|7.74%
			\|Calculated using the WACC formula from above estimates
	\|-		\|-
	\|Terminal growth rate		\|Terminal growth rate
	\|3%		\|3%
			\|Analysts expectations <ref name=":2" />
	\|}		\|}
	The market risk premium fluctuates between 4.2% and 5.2% <ref>https://valueinvesting.io/AMZN/valuation/wacc</ref>, thus we employ an average of 4.7% for our calculations. The volatility of Amazon's stock price is viewed as being lower relative to the general market. This is reflected in its beta, which varies from 0.64 to 1.12 <ref>https://valueinvesting.io/AMZN/valuation/wacc</ref>, yielding an average of 0.88. Consequently, we derive a cost of equity of 8.01%. When this is combined with the cost of debt, which stands at 5.25% <ref>[https://www.theguardian.com/business/2023/jun/14/fed-interest-rate-pause-inflation#:~:text=US%20Federal%20Reserve%20officials%20have,year%20of%20consecutive%20rate%20increases. https://www.theguardian.com/business/2023/jun/14/fed-interest-rate-pause-inflation#:~:text=US%20Federal%20Reserve%20officials%20have,year%20of%20consecutive%20rate%20increases.]</ref>, we arrive at a weighted average cost of capital (WACC) of 7.74%.		The market risk premium fluctuates between 4.2% and 5.2% <ref name=":4">https://valueinvesting.io/AMZN/valuation/wacc</ref>, thus we employ an average of 4.7% for our calculations. The volatility of Amazon's stock price is viewed as being lower relative to the general market. This is reflected in its beta, which varies from 0.64 to 1.12 <ref name=":5">https://valueinvesting.io/AMZN/valuation/wacc</ref>, yielding an average of 0.88. Consequently, we derive a cost of equity of 8.01%. When this is combined with the cost of debt, which stands at 5.25% <ref name=":6">[https://www.theguardian.com/business/2023/jun/14/fed-interest-rate-pause-inflation#:~:text=US%20Federal%20Reserve%20officials%20have,year%20of%20consecutive%20rate%20increases. https://www.theguardian.com/business/2023/jun/14/fed-interest-rate-pause-inflation#:~:text=US%20Federal%20Reserve%20officials%20have,year%20of%20consecutive%20rate%20increases.]</ref>, we arrive at a weighted average cost of capital (WACC) of 7.74%.

	DCF calculation incorporates the H-model with an underlying assumption that starting from 2027 Amazon's free cash flows will grow by 7% until until 2037 where the terminal growth of cash flows will be 3%. The H-model assumes a smooth transition between the two stage of Amazon lifecycle. In the process of discounting the future Free Cash Flow to its present value, the WACC serves as the discount factor. This calculation leads to a share price of $138.23, a summary of which is presented in the table below.		DCF calculation incorporates the H-model with an underlying assumption that starting from 2027 Amazon's free cash flows will grow by 7% until until 2037 where the terminal growth of cash flows will be 3%. The H-model assumes a smooth transition between the two stage of Amazon lifecycle. In the process of discounting the future Free Cash Flow to its present value, the WACC serves as the discount factor. This calculation leads to a share price of $138.23, a summary of which is presented in the table below.

>Vraj Agarwal: /* Relative Valuation */

2023-07-14T15:58:34Z

Relative Valuation

← Older revision		Revision as of 16:58, 14 July 2023
Line 1,253:		Line 1,253:
	!Name		!Name
	!Mkt Cap (USD)		!Mkt Cap (USD)
	!FY1 EV/~~Rev~~		!FY1 EV/Sales
	!FY1 EV/EBITDA		!FY1 EV/EBITDA
	\|-		\|-

>Vraj Agarwal: Relative Valuation

2023-07-14T13:35:01Z

Relative Valuation

Show changes