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At the end of last year, I set an optimistic price target for Amazon.com, Inc. (NASDAQ:AMZN) (NEOE:AMZN:CA), expecting the shares to hit $220 by the end of 2024 helped by strong consumer spending and major profit margin expansion. So
Amazon's Efficiency Era Begins: Why I'm All In
Summary
- Amazon's efficiency era began with management's focus on bottom-line instead of top-line growth.
- The operating margin has reached 9.9% in Q2, and I project expansion to 12.2% by 2027, with $105B in operating income.
- Q2 2024 saw Amazon's revenue hit $148B, with AWS growing 19% YoY, contributing 69.8% to Operating Income.
- Amazon's diversified business model, including retail, AWS, and advertising, is expected to drive 10% annual top-line growth until 2027.
- Despite a rich P/E ratio, Amazon's valuation is attractive, with a 17.54x Blended P/OCF, projecting 40-45% annual ROR over the next three years.
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