Amazon.com, Inc. CAPEX surged on 138% and Revenue surged on 37.6%
02/02/2021 • About Amazon.com, Inc. (
$AMZN) • By InTwits
Amazon.com, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Amazon.com, Inc. is a fast growth stock: 2020 revenue growth was 37.6%, 5 year revenue CAGR was 29.3% at 2020 ROIC 14.1%
- Amazon.com, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.9%. At the same time it's a lot of higher than industry average of 4.5%.
- CAPEX is quite volatile: $40,140m in 2020, $16,861m in 2019, $13,427m in 2018, $11,955m in 2017, $7,804m in 2016
- The company has highly profitable business model: ROIC is 14.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 37.6%. Revenue growth showed acceleration in 20Q4 - it increased 43.6% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.2 pp from -21.6% to -17.4% in 2020. EBITDA Margin stuck to a growing trend at 1.5 pp per annum in the last 5 years.
Gross Margin decreased slightly on 1.4 pp from 41.0% to 39.6% in 2020. During 2016-2020 Gross Margin topped in 2019 at 41.0%. SG&A as a % of Revenue decreased slightly on 1.2 pp from 8.6% to 7.4% in 2020. During 2016-2020 SG&A as a % of Revenue topped in 2019 at 8.6%.
Net Income margin increased slightly on 1.4 pp from 4.1% to 5.5% in 2020. Net Income margin grew at 1.00 pp per annum in 2016-2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 10.4% in 2020. Amazon.com, Inc. showed CAPEX/Revenue growth of 3.7 pp from 6.7% in 2017 to 10.4% in 2020. It's average CAPEX/Revenue for the last three years was 7.4%. Amazon.com, Inc. invested a big chunk of EBITDA (75.5%) to CAPEX to secure its growth.
Return on investment
The company operates at high and attractive ROE (27.4%) while ROIC is a bit lower (14.1%). ROIC increased slightly on 1.0 pp from 13.0% to 14.1% in 2020. ROE increased on 5.5 pp from 21.9% to 27.4% in 2020.
Leverage (Debt)
Debt level is 1.1x Net Debt / EBITDA and 1.9x Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from 1.0x to 1.1x in 2020. Debt surged on 29.6% while cash jumped on 16.7%.
Amazon.com, Inc. has no short term refinancing risk: cash is higher than short term debt (261.4%).
Valuation and dividends
The company's trades at EV/EBITDA 32.4x and P/E 77.9x.
Management team
Jeffrey P Bezos "Jeff" is a the company's CEO. Jeffrey P Bezos "Jeff" has spent 24 years with the company. Amazon.com, Inc.'s CFO Brian T Olsavsky has spent 5 years with the company.
Financial and operational results
FY ended 12/31/2020
Amazon.com, Inc. ($AMZN) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 135,987 | 177,866 | 232,887 | 280,522 | 386,064 | 37.6% |
| Gross Profit | 47,722 | 65,932 | 93,731 | 114,986 | 152,757 | 32.8% |
| SG&A | 9,665 | 13,743 | 18,150 | 24,081 | 28,676 | 19.1% |
| EBITDA | 12,302 | 15,584 | 27,762 | 39,999 | 53,169 | 32.9% |
| Net Income | 2,371 | 3,033 | 10,073 | 11,588 | 21,331 | 84.1% |
Balance Sheet
|
|---|
| Cash | 19,334 | 20,522 | 31,750 | 36,092 | 42,122 | 16.7% |
| Short Term Debt | 5,197 | 6,221 | 9,502 | 14,330 | 16,115 | 12.5% |
| Long Term Debt | 15,213 | 37,926 | 39,787 | 63,205 | 84,389 | 33.5% |
Cash flow
|
|---|
| Capex | 7,804 | 11,955 | 13,427 | 16,861 | 40,140 | 138.1% |
Ratios
|
|---|
| Revenue growth | 27.1% | 30.8% | 30.9% | 20.5% | 37.6% | |
| EBITDA growth | 44.5% | 26.7% | 78.1% | 44.1% | 32.9% | |
|
|---|
| Gross Margin | 35.1% | 37.1% | 40.2% | 41.0% | 39.6% | -1.4% |
| EBITDA Margin | 9.0% | 8.8% | 11.9% | 14.3% | 13.8% | -0.5% |
| SG&A, % of revenue | 7.1% | 7.7% | 7.8% | 8.6% | 7.4% | -1.2% |
| Net Income Margin | 1.7% | 1.7% | 4.3% | 4.1% | 5.5% | 1.4% |
| CAPEX, % of revenue | 5.7% | 6.7% | 5.8% | 6.0% | 10.4% | 4.4% |
|
|---|
| ROIC | 11.9% | 7.3% | 14.9% | 13.0% | 14.1% | 1.0% |
| ROE | 14.5% | 12.9% | 28.3% | 21.9% | 27.4% | 5.5% |
| Net Debt/EBITDA | 0.1x | 1.5x | 0.6x | 1.0x | 1.1x | 0.1x |
Amazon.com, Inc. ($AMZN) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 75,452 | 88,912 | 96,145 | 125,555 | | 26.4% | 40.2% | 37.4% | 43.6% |
| EBITDA | 10,419 | 12,740 | 14,051 | 15,959 | | 3.1% | 39.1% | 45.5% | 44.1% |
| Net Income | 2,535 | 5,243 | 6,331 | 7,222 | | -28.8% | 99.7% | 196.7% | 121.0% |
Balance Sheet
|
|---|
| Cash | 27,201 | 37,466 | 29,930 | 42,122 | | 17.7% | 65.7% | 28.7% | 16.7% |
| Short Term Debt | 14,414 | 14,745 | 14,571 | 16,115 | | 16.2% | 12.1% | -3.3% | 12.5% |
| Long Term Debt | 63,737 | 75,926 | 81,518 | 84,389 | | 12.6% | 29.9% | 36.9% | 33.5% |
Ratios
|
|---|
| Gross Margin | 41.3% | 40.8% | 40.6% | 36.9% | | -1.8% | -1.9% | -0.4% | -1.4% |
| EBITDA Margin | 13.8% | 14.3% | 14.6% | 12.7% | | -3.1% | -0.1% | 0.8% | 0.0% |
| Net Income Margin | 3.4% | 5.9% | 6.6% | 5.8% | | -2.6% | 1.8% | 3.5% | 2.0% |
Peers in Internet & Direct Marketing Retail
Below we provide Amazon.com, Inc. benchmarking against other companies in Internet & Direct Marketing Retail industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Farfetch Limited ($FTCH) | - | 59.4% | 56.1% | 69.5% | 63.9% |
| Cango Inc. ($CANG) | - | 142.3% | 3.7% | 31.9% | 42.5% |
| Stitch Fix, Inc. ($SFIX) | - | 33.8% | 25.5% | 28.6% | 8.5% |
| Booking Holdings Inc. ($BKNG) | - | 18.0% | 14.6% | 3.7% | -54.9% |
| |
|---|
| Median (4 companies) | - | 46.6% | 20.0% | 30.3% | 25.5% |
|---|
| Amazon.com, Inc. ($AMZN) | - | 30.8% | 30.9% | 20.5% | 37.6% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cango Inc. ($CANG) | 60.8% | 63.3% | 60.2% | 62.6% | 46.5% |
| Farfetch Limited ($FTCH) | 48.3% | 53.1% | 49.5% | 45.0% | 46.1% |
| Stitch Fix, Inc. ($SFIX) | 44.3% | 44.5% | 43.7% | 44.6% | 44.1% |
| |
|---|
| Median (3 companies) | 54.6% | 58.2% | 49.5% | 45.0% | 46.1% |
|---|
| Amazon.com, Inc. ($AMZN) | 35.1% | 37.1% | 40.2% | 41.0% | 39.6% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Booking Holdings Inc. ($BKNG) | 29.9% | 38.6% | 39.7% | 39.8% | 0.3% |
| Stitch Fix, Inc. ($SFIX) | 9.3% | 4.0% | 4.4% | 2.4% | -1.7% |
| Farfetch Limited ($FTCH) | -33.8% | -21.6% | -24.9% | -26.9% | -24.1% |
| |
|---|
| Median (3 companies) | 19.6% | 21.3% | 4.4% | 12.8% | -1.7% |
|---|
| Amazon.com, Inc. ($AMZN) | 9.0% | 8.8% | 11.9% | 14.3% | 13.8% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Booking Holdings Inc. ($BKNG) | 2.0% | 2.3% | 3.0% | 2.4% | 4.2% |
| Stitch Fix, Inc. ($SFIX) | 2.1% | 1.8% | 1.4% | 2.0% | 1.8% |
| Farfetch Limited ($FTCH) | 2.5% | 3.3% | 3.5% | 3.9% | 1.6% |
| |
|---|
| Median (3 companies) | 2.1% | 2.0% | 3.0% | 2.7% | 1.8% |
|---|
| Amazon.com, Inc. ($AMZN) | 5.7% | 6.7% | 5.8% | 6.0% | 10.4% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cango Inc. ($CANG) | - | 48.3% | 6.6% | 4.3% | 3.3% |
| Booking Holdings Inc. ($BKNG) | 17.3% | 23.2% | 27.3% | 32.0% | -3.7% |
| Stitch Fix, Inc. ($SFIX) | - | 32.2% | 20.5% | 6.6% | -10.7% |
| Farfetch Limited ($FTCH) | - | -35.3% | -22.7% | -27.7% | -124.7% |
| |
|---|
| Median (4 companies) | 17.3% | 27.7% | 13.6% | 5.5% | -7.2% |
|---|
| Amazon.com, Inc. ($AMZN) | 11.9% | 7.3% | 14.9% | 13.0% | 14.1% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cango Inc. ($CANG) | 0.8x | -1.3x | - | 1.8x | - |
| Booking Holdings Inc. ($BKNG) | 1.6x | 1.4x | 1.0x | 0.5x | 104.1x |
| Stitch Fix, Inc. ($SFIX) | -1.3x | -2.8x | -5.6x | -4.5x | - |
| |
|---|
| Median (3 companies) | 0.8x | -1.3x | -2.3x | 0.5x | 104.1x |
|---|
| Amazon.com, Inc. ($AMZN) | 0.1x | 1.5x | 0.6x | 1.0x | 1.1x |
