Every Amazon investor should track this number.
Amazon (NASDAQ: AMZN ) It’s a winning stock for most of its public existence, except for the usual destruction and any asset leaks. The company tends to hit the mark, and constantly creates new sources of income and takes control of new businesses. Now, it’s focusing on generative artificial intelligence (AI), a high-margin business that should boost top and bottom lines.
That’s important, because if you look at its financial reports and stock price, you’ll notice that Amazon’s stock price closely tracks changes in its stock price. net income.
Amazon management likes to focus. Operating incomeAnd it highlights that metric at the beginning of each quarterly report. Because operating income factors refer to tax-related expenses and other items that do not have a strong impact on the company’s operations.
This can be a fiscal responsibility. In fact, Warren Buffett himself, a legend and owns a stake in Amazon, has called the net income measure “worse than useless.” Instead, it focuses on the revenue stream, which shows a more complete picture of the company’s financial situation.
However, not every investor is as wise as Buffett, and in any case, the merits of focusing on operating income and net income are debatable. The choice also affects valuation metrics like the P/E ratio, so whether net income is the best bottom-line measure to follow is important to the market. And Amazon’s stock price tracks net income more than revenue or operating income.
Net income is included later in the financial statements, but investors need to find it. Net income in the third quarter increased to $15.3 billion in 2024 from $9.9 billion in 2023. It should not be seen on its own, but as a piece of the overall picture.
Before you buy stock in Amazon, consider this:
of Motley Fool Stock Advisor An analytical team identified the believers. 10 best stocks For investors to buy now… and Amazon was not one of them. 10 stocks that made the cut could make monster returns in the coming years.
Think about when Nivea This listing was made on April 15, 2005… If you invested $1,000 at the time we posted it, You will have $816,504!*
Stock consultant It provides investors with an easy-to-follow blueprint for success, including guidance on portfolio construction, regular analyst updates, and two new stock picks every month. of Stock consultant It has a service. More than four times Return of the S&P 500 since 2002*.