While revenue expansion may captivate investors' attention momentarily, the ultimate litmus test lies in profitability metrics. However, profitability is contingent upon a critical determinant: gross margin. Gross profit delineates the residual sum post-deduction of the costs of goods sold, thereby constituting the upper threshold of potential profitability.
Historically, e-commerce enterprises have grappled with narrow margins, owing to their operational paradigm. Nevertheless, Amazon has navigated this terrain by diversifying its revenue streams, with its service-centric divisions eclipsing the revenue generated by its core retail operations.
Amazon's current valuation, despite its recent surge, remains below the levels witnessed during the 2018-2022 timeframe, serving as a salient indicator for prospective investors. This trend underscores the potential for Amazon to attain loftier valuations without being deemed overvalued vis-à-vis historical benchmarks.
Market Info as of 16/04/2024
Market Cap: 1.91 trillion USD
Current Stock Price: $183.62
52-week range: $189.77 (high) & $101.15 (low)
Earnings Per Share: $1.01 for the December 2023 fiscal quarter end
Dividend Yield: NA