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AMZN, a 36% higher target price
Current 3,372 Target 4,600 (+36%)
October 31st, 2021
1 minute read
Sales fell by -2%
Costs at average -82%
Cashflow negative on working capital, to turn back positive
Balance sheet, lower leverage
Valuation, a 36% higher target price
1 minute read
Sales fell by -2%
- Sales fell by -2% in the third quarter to 110,812 million dollars which is below our forecast 122,126 million dollars.
- This brings the quarterly average growth to 5%.
- We predict faster average growth of 6% in this next 12 months to bring sales to 137,857 million dollars in the third quarter of 2022.
Costs at average -82%
- The cash cost ratio was one point lower at -77% in the third quarter but net profit was lower at 3,156 million dollars on higher non cash costs.
- The average cost ratio is now at -82%.
- We use the average -82% cost ratio to predict a higher 11,777 million dollars profit in the third quarter of 2021.
Cashflow negative on working capital, to turn back positive
- Free cashflow was negative at -11,128 million dollars in the third quarter with higher investment spending of -15,748 million dollars
- Average quarterly Cashflow is now also negative at -2,653 million dollars.
- We use the same -15,748 million dollars investment spending which with higher sales gives a 5,831 million dollars Cashflow in the third quarter of 2021.
Balance sheet, lower leverage
- Cash increased from 40,380 to 42,122 million dollars in the third quarter.
- Liabilities declined from 245,516 to 227,791 million dollars so net cash improved from -205,136 to -185,669 million dollars.
- With our forecast cashflow & a -30,440 million dollars equity payout net cash will be -182,011 million dollars in 12 months time.
Valuation, a 36% higher target price
- AMZN capital from the last six years improved slightly to-34,408 million dollars in the third quarter & will be -11,082 million dollars in the next 12 months.
- At the current market value of 1,710,000 million dollars based on our forecasts it’s at 5.17X assets with a 12 years payback & a 2% yield.
- Our cashflow forecast is 23,326 million dollars which means a 73X valuation. At a 100X valuation gives a 36% higher target price of 4,600.
