AMAZON COM INC (AMZN) Stock Analysis
AMAZON COM INC (AMZN) Stock Analysis
Analysis from 10-Q filed 2025-10-31. Data as of Q4 2025.
Overall Grade: F (Concerning)
AMAZON COM INC faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 15.6% | Solid returns |
| FCF Margin | 1.1% | Cash flow pressure |
| Debt/Equity | 0.2x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 15.6% suggests durable competitive advantages and efficient capital allocation.
Explore AMAZON COM INC: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: AMAZON COM INC earns 15.6% ROIC, Top 50% in Consumer Discretionary
AMAZON COM INC's trailing-twelve-month ROIC of 15.6% ranks Top 50% in Consumer Discretionary companies (sector median: 8.8%), driven by NOPAT margin of 9.0% combined with asset turnover of 1.0x. Source: 10-Q filed 2025-10-31. Gross margin of 50.3% with operating margin at 11.2% reflects strong pricing power.
| Metric | AMZN | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 15.6% | Good | Above sector median of 8.8% |
| Return on Equity (ROE) | 22.9% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 50.3% | Excellent | Strong pricing power |
| Operating Margin | 11.2% | Good | Moderate operational efficiency |
Cash Flow: AMAZON COM INC generates $7.7B FCF at 1.1% margin, positive NaN/8 quarters
AMAZON COM INC generated $7.7B in free cash flow (TTM), a 1.1% FCF margin, a margin that ranks Bottom 50% in Consumer Discretionary. Operating cash flow exceeds net income by 1.8x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-31.
| Metric | AMZN | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 1.1% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $7.7B | Good | Positive cash generation |
| OCF/Net Income | 1.8x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: AMAZON COM INC at 0.2x leverage
AMAZON COM INC's debt-to-equity ratio of 0.2x reflects conservative leverage. Net cash position of $57.5B provides financial flexibility. Source: 10-Q filed 2025-10-31.
| Metric | AMZN | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.2x | Excellent | Conservative capital structure |
| Net Cash Position | $57.5B | Excellent | Net cash positive |
Valuation: AMAZON COM INC trades at 31.7x earnings
AMAZON COM INC trades at a P/E of 31.7x. Free cash flow yield of 0.3% reflects market expectations for growth.
| Metric | AMZN | Rating | Context |
|---|---|---|---|
| P/E Ratio | 31.7x | Adequate | Premium valuation |
| EV/Sales | 3.4x | Good | Growth premium priced in |
| FCF Yield | 0.3% | Warning | Lower cash yield |
Capital Allocation: AMAZON COM INC returns 0.0% shareholder yield
AMAZON COM INC's total shareholder yield is 0.0% (dividends + buybacks). Source: 10-Q filed 2025-10-31.
| Metric | AMZN | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 0.0% | Warning | Dividend + buyback yield combined |
| Total Capital Returned (TTM) | $0 | Adequate | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 15.6% | Top 50% | 1.8x above |
| Free Cash Flow Margin | 1.1% | Bottom 50% | 0.4x below |
| Gross Margin | 50.3% | Top 50% | 1.3x above |
| Operating Margin | 11.2% | Top 50% | 2.4x above |
| Return on Equity (ROE) | 22.9% | Top 50% | 2.1x above |
| P/E Ratio | 31.7x | N/A | - |
Financial Scorecard
| Metric | AMZN | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 15.6% | Good | Top 50% of sector (median: 8.8%) |
| Free Cash Flow Margin | 1.1% | Warning | Bottom 50% of sector (median: 2.7%) |
| Gross Margin | 50.3% | Excellent | Top 50% of sector (median: 39.5%) |
| Debt to Equity Ratio | 16.7% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 31.7x | Adequate | Growth premium |
| Free Cash Flow Yield | 0.3% | Red flag | Growth-focused valuation |
Frequently Asked Questions
Q: What is AMAZON COM INC's Return on Invested Capital (ROIC)?
AMAZON COM INC (AMZN) has a trailing twelve-month Return on Invested Capital (ROIC) of 15.6%. This compares above the sector median of 8.8%. An ROIC between 12-20% indicates solid capital allocation and sustainable competitive position.
Q: What is AMAZON COM INC's Free Cash Flow Margin?
AMAZON COM INC (AMZN) has a free cash flow margin of 1.1%, generating $7.7 billion in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is AMAZON COM INC stock overvalued or undervalued?
AMAZON COM INC (AMZN) trades at a P/E ratio of 31.7x, which is above the sector median of N/A. The EV/Sales multiple is 3.4x. Free cash flow yield is 0.3%, reflecting growth expectations priced into the stock.
Q: What is AMAZON COM INC's revenue and earnings growth?
AMAZON COM INC (AMZN) grew revenue by 12.4% year-over-year. Earnings per share increased by 29.7% compared to the prior year. Solid growth above 10% suggests healthy business momentum.
Q: How does AMAZON COM INC compare to competitors in Consumer Discretionary?
Compared to other companies in Consumer Discretionary, AMAZON COM INC (AMZN) shows: ROIC of 15.6% is above the sector median of 8.8% (Top 27%). FCF margin of 1.1% trails the sector median of 2.7% (Bottom 34% of sector). Gross margin at 50.3% is 10.8 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Discretionary companies with available SEC filings.
Q: What warning signs should I watch for with AMAZON COM INC?
Investors in AMAZON COM INC (AMZN) should monitor these potential warning signs: 1) FCF margin is thin at 1.1%, leaving limited buffer for economic downturns. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-31. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.