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Amazon’s stock (NASDAQ
The company’s net sales increased 22% y-o-y to $469.8 billion in FY 2021. It was mainly driven by a 12% growth in product-based revenues, followed by a 34% rise in net services sales. In terms of operating segments, the North-America sales grew 18% y-o-y, followed by a 22% and 37% increase in the international and AWS revenues, respectively. All in all, it translated into a 56% jump in the net income to $33.4 billion. The jump was primarily driven by a valuation gain of $11.8 billion from equity securities of Rivian Automotive.
Moving forward, we anticipate the firm to see moderate growth in revenues in FY2022, as consumers’ discretionary spending is likely to be negatively impacted due to macroeconomic factors. Further, improvement in offline retail sales is expected to reduce the growth rate of e-commerce revenues. Notably, AMZN has provided revenue guidance of $116-$121 billion for the second quarter. Altogether, Amazon’s revenues are expected to touch $529 billion in FY2022. Further, its net income margin is likely to take a hit in the year, leading to a net income of $13.7 billion. This coupled with an annual EPS of $26.85 and a P/E multiple of 136x will lead to the valuation of $3651.
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