AMZN

What is AMZN?

OK, we'll unpack this for you. AMZN is the ticker code for Amazon.com, Inc., the world’s largest online retailer.

Founded as Cadabra, Inc. in July 1994, the company was initially run by Jeff Bezos from his home garage. In May 1997, a little less than three years later, Amazon went public on the NASDAQ.

As of March 2022, Amazon’s market capitalisation sits at US$1.48t, making it one of the world’s most valuable companies.

How does AMZN make money? 

Originally an online retailer that only sold books, Amazon eventually expanded to become known as “the everything store.” Some joke that to understand what Amazon does, you need to ask the question, “what doesn’t Amazon do?”

Most of Amazon’s revenue comes through the retail sale of an endless line of consumer products and subscriptions across North America and globally. Its online stores are its biggest source of revenue, coming primarily from the purchase and resale of physical and digital products.

Amazon also earns an immense amount by facilitating third-party seller services. Third parties use Amazon as a marketplace to sell directly to shoppers. Amazon earns revenue from these third parties by charging them commissions, fulfilment and shipping fees.

The remainder of Amazon’s revenue comes from a wide variety of sources. These include, but are not limited to, the provision of cloud infrastructure and computing services, advertising solutions, Amazon Prime subscriptions, the development and production of media content as well as the manufacture and sales of electronic devices including Kindle, Echo and Fire TV.

Is AMZN profitable? 

Oh yes, according to Amazon’s latest quarterly report, the company is profitable.

Amazon’s net sales have grown over the past 3 years from US$280.5b in FY2019 to US$386.1b in FY 2020 to US$469.8b in FY 2021 — a compound annual growth rate of almost 30%.

Earnings per share (EPS) has also grown considerably, almost tripling, for the same time period from US$23.01 to US$41.83 to US$64.81.

As of March 2022, Amazon’s market capitalisation sits at US$1.48t. While the company currently has US$57b of debt, it also has over US$96b of cash.

As of 31st August 2022, the AMZN stock price is $128.73, down 32% from its 52W high of $188.11.

Does AMZN pay a dividend? 

No, Amazon does not pay a dividend at this time. 

Historically, Amazon has shown a preference for reinvesting its earnings into expanding its business and returning long-term value to shareholders.

Amazon’s executives have not announced any plans to pay dividends in the near future.

When does AMZN report? 

Amazon usually reports earnings on a quarterly basis. 

Their annual report is usually made available to the public in January, while quarterly reports have historically been released in February, April, July and October.