Is Amazon Stock Hugely Undervalued???
Amazon, a big player in the international market. Amazon is a hub of multiple businesses. Amazon.com inc. is basically an American multinational technology company based in Washington, US. Amazon Focuses on e-commerce, Digital Streaming, Cloud Computing, and Artificial Intelligence. It is one of the big competitors of Google, Facebook, Microsoft, and Apple. It is one of the most influential cultural and economic forces. The founder of Amazon is "Jeff Bezos". It started its business by selling books online, but afterward, it started selling other different objects, and in 2015 its surpassed Walmart, one of the world's largest retail store, now by expanding its Target market and by expanding its products line, now Amazon is competing for Big giant of technology. According to the latest writing, Amazon’s share price is almost $3200, which valued the company at approximately $1.6 trillion. Still, the share price can be increased to $6000 if its valuation is done as per its competitors in the retail market like Walmart and Coca-Cola. And if Amazon's share were valued as per its big tech competitors like Google and Microsoft, the share price could be increased to $4,500. The price of shares depends on which method is used by one to value the company's shares.
Also, it is noted that Amazon is playing differently and is trading at a discount as compared to its big tech competitors, retail competitors, and consumer staples competitors, and this technique helps Amazon to grow its business and increase its sales smartly.
Usually, investors have to consider different measures while valuing Amazon's stock like the Dividend Discount Model, Discounted Cashflow Method, Companies Analysis, etc. Finding the true or right measure for Amazon is not easy, because it's not like retail companies like Walmart and not like big tech companies like Google. It's a hub of businesses, running different businesses including selling retail products, Prime Membership Program, Amazon Web, Cloud Computing, and many more. So, using one measure and devaluing is just stupidity.
According to the writing, Amazon's stocks are measured using price-to-earnings growth, that factors company's share price, it's expected earnings over a period of time and its outstanding shares of common stock. Its different lines of business continuously boost Amazon to keep growing.
In start of 2020, while pandemic starts, its share price increased but afterwards it decreased and never reached the same level as in start of pandemic. Situation and measures valued stocks differently, so it's important to analyze them closely.
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