When traditional stores set to close due to the rapid growth of e-commerce giants like Amazon, investors are paying close attention. It goes without saying that Amazon is one of the most successful companies in the world, and its stock performance reflects that. But with such disruptive growth, investors are left wondering if it’s still a good buy – is Amazon stock a buy after stores are set to close? In this article, we’ll look at the potential of Amazon stock and analyze it from both a fundamental and technical perspective.
The Growing Popularity of Online Shopping
The rise of online shopping has had far-reaching implications for traditional brick-and-mortar retailers. Not only do online stores eliminate the middleman and provide customers with better convenience and variety, but they’ve also led to a dramatic shift in customer behavior – one that favors companies with robust e-commerce operations such as Amazon. For example, the average customer now does nearly 50% of their shopping online. Clearly, the increased demand for online goods has taken its toll on traditional stores, which are now being forced to cut costs and offer more competitive prices that simply can’t compete with Amazon’s convenience, pricing and selection.
Why Invest In Amazon?
The mere thought of investing in Amazon stock is a prospect that investors can’t seem to ignore. A quick glance at Amazon’s stock performance shows a positive trend – up nearly 90% so far in 2020. With Amazon’s powerful e-commerce network, investors are expecting the trend to continue. Here are a few key reasons why you should consider investing in Amazon stocks:
• Amazon offers access to the world’s largest e-commerce platform.
• The company is consistently growing its customer base, making it an attractive long-term investment opportunity.
• Amazon’s market capitalization is over one trillion dollars, making it one of the most valuable companies in the world.
• Amazon’s wide selection of goods and services makes it a one-stop shop for customers.
• Amazon’s customer base is increasingly loyal and it has low switching cost, resulting in higher customer retention.
• Amazon’s stock has been on a consistent rise in the past year, making it a safe bet for long-term growth.
Fundamental Analysis
Amazon stock has been on a consistent rise, making it a relatively safe choice for investors. But what are the drivers behind this appreciation? Let’s take a closer look at Amazon’s financials.
• Revenue: For the last quarter, Amazon’s revenue increased by 29.5% to reach $96.2 billion.
• Net income: Amazon reported a net income of $2.1 billion, up from $1.6 billion a year ago.
• Operating Cash Flow: Amazon’s operating cash flow grew 33% to reach $18.4 billion.
• Free cash flow: Amazon’s free cash flow was $18.4 billion in the last quarter.
These figures provide a strong indication of Amazon’s financial health. The company’s revenue and cash flow continue to grow, providing investors with confidence in the stock.
Technical Analysis
Technical analysis, which focuses on analyzing price trends, can also help us assess whether Amazon stock is a buy after stores set to close. To gain a better understanding of the stock’s performance, let’s look at its price chart:
The chart shows that Amazon stock has been on a consistent upward trend since 2016. The stock has continued to make higher highs, indicating that investors are becoming increasingly bullish on the stock. Additionally, Amazon’s stock has continued to make higher lows, signifying sustained strength in the stock.
Overall, Amazon stock appears to be a viable long-term investment. Not only does Amazon have a robust and growing revenue stream, but it also offers investors access to the world’s largest e-commerce platform. Furthermore, Amazon’s share price has been on a sustainable upward trend, making it a relatively safe option for investors. Therefore, while there may be some risks to consider, it’s fair to say that Amazon stock is an attractive buy after stores set to close.
