Amazon is adding generic drugs to the list of goods and services it offers. How does that affect sales and share price?
Amazon may suffer from the economic contraction, but its expansion into the pharmaceutical market may help offset some of these losses. That’s behind thinking RxPass, Amazon’s latest offering that allows Prime members to order generics for a subscription of $5 USD per month. Below we take a look at some of Amazon’s recent financial data and price momentum.
Tracking AMZN’s performance from 2020 to 2022: net income, price/sales ratio and turnover
AMZNThe company’s net profit has been volatile in recent years. Twelve-month net income more than tripled from March 2020 to December 2021, but then fell sharply to 11.61 billion in June 2022. Overall, AMZN’s net income is on an upward trend, with the latest value of 11.32 billion is 19% higher than its starting value in March 2020. Here is a graph of AMZN’s net income over time.
AMZN’s price/sales ratio has fluctuated over the recorded period from 2020 to 2022. Starting at 3.85 in March 2020, it peaked at 4.93 in June 2020 before falling to a low of 2.10 in September 2022. general trend shows a decline in AMZN’s price/sales ratio, with a decrease of 21.2% from its initial value. This is likely a reflection of the bear market and drop in multiples that virtually all stocks have seen.
AMZN’s revenue has generally increased over a two-year period from March 2020 to September 2022, with the largest growth occurring between December 2020 and September 2021, when revenue grew by approximately 24%. The last value of this data in September 2022 marks a time when Amazon crossed the $500 billion mark in 12-month revenue. Amazon’s revenue growth declined in 2022, but remains positive, so overall revenues are still on the rise.
AMZN share price rises rapidly over a period of 6 months
AMZN’s share price has steadily declined from July 29, 2022 ($130.50) to January 20, 2023 ($95.84). These declines were accompanied by a number of small rallies – most notably, from August 12 to August 26, the share price rose from $140.94 to $141.97 ($ + 1.03), from September 2 to September 9, the share price rose from $ 128.25 to $128.94 ($+0.79), and from Oct. 14 to Oct. 21, the share price rose from $111.78 to $115.55 ($+3.77) — but the overall downtrend is pretty clear. In January 2023, there was a price increase, as it did for the broader US stock market. Here is a chart of the price of AMZN over the last 180 days.
shares were trading at $400.27 per share Tuesday afternoon, down $0.36 (-0.09%). Year-to-date, it has gained 4.66% versus a percentage increase of the benchmark S&P 500 index over the same period.
About the author: Simit Patel
Simit Patel has 2 decades of investment experience applying a top-down approach starting with macroeconomics followed by price action technical analysis to find more winning trades.