Amazon Stock: Opportunity Right Before Christmas?

Last Updated: 18. Dezember 2023By

If you take a look at the stock market, you may notice the Amazon stock in these times. The (online) company is certainly one of the beneficiaries of the Christmas business again. The question for us as investors: Do the ongoing business also open up a new chance for rising prices?

Amazon: What a year The chances have become at least smaller in the past 12 months. Because the share has already achieved an eminent success. Since January 1, it has risen by around 76%. The share has now driven the market value back to well over $1 billion and even reached $1.55 billion.

That’s a proud price. Depending on the estimate of the results in the current financial year, the company will probably achieve a P/E ratio of around 50 to 60. That’s not too much (sometimes even comparatively little) in the historical development of the Amazon share, but really not cheap either.

Next year, with rising profits, the P/E ratio should drop to about 40 (maybe up to 50). That’s still far from being „cheap“. You should take this into account. The price-to-sales ratio (P/S) is currently just under 3. The sales point to a good opportunity, so is my impression.

How far can Amazon go? But regardless of these numbers, the Amazon share poses another question: How far can it go in the long run? Analysts see an average target price that is about 16% above current values. That’s decent, but no major breakthrough anymore.

So there are neither very convincing economic reasons for buying this stock nor estimates on the market. Nevertheless, I am positive about the company as a shareholder. Because here at least what Warren Buffett would call a „moat“ is emerging. Amazon certainly dominates the online trade, although not as the only company.

But I also expect further services such as media offers (e.g. you can regularly watch the Champions League). There will be more offers, artificial intelligence is far from being exhausted. The advantage of Amazon is that the company has bound so many customers to it sustainably. That’s what I understand by „moat“. Therefore, from my point of view: The company is very attractive with its framework conditions, but the share is not cheap. That only refers to you – if you were an investor – to a long-term investment horizon.

Amazon: Not cheap, but strong – WKN: 906866 – ISIN: US0231351067 Source: