Forecasting a stock price is an extremely difficult task. It involves analyzing the trends driving the stock and figuring out how these trends are likely to play out in the future. This blog post will help you understand the reasons behind the recent rise of Amazon stock price. To begin with, let’s understand what is driving the price of Amazon stock.
What Drives the Price of Amazon Stock?
First off, let’s understand what is driving the Amazon stock forecast. Amazon is one of the biggest e-commerce marketplaces in the world and according to many is one of the best stocks to buy now. The company has more than 140 million active customers and over 117 million products sold every month. The marketplace is primarily driven by the company’s advertising and e-commerce revenue. However, the company has been growing the revenue from the third-party sellers who sell the products on its platform. The company’s advertising revenue has been declining over the years. In fact, the advertising revenue accounted for just 15% of the total revenue in the first quarter of 2018. Despite this, the stock price has been growing consistently. What is driving the price of Amazon stock? To understand this, let’s understand what is driving the price of Amazon stock.
Growth in Revenue and EBITDA
Amazon’s growth in revenue and EBITDA is the primary reason behind the Amazon stock price growth. In fact, the revenue and EBITDA have been growing exponentially. This has resulted in increasing the value of the company. The revenue growth has been driven by increasing users and sellers on the marketplace. The company has been investing heavily on the growth of sellers’ and users’ base. The investments have led to tremendous growth in the revenue. In fact, the revenue has grown by 42% in the last fiscal year. Similarly, the EBITDA has also been increasing exponentially. This has resulted in increasing the shareholders’ value. The EBITDA has grown by 60% in the last fiscal year.
Active Strategy to Grow Revenue
Another key reason behind the Amazon stock price growth is the active strategy to grow revenue. In fact, over the past few years, Amazon has been investing heavily on growing the revenue. The investments have resulted in tremendous growth in the revenue. As per company’s guidance, the revenue growth is expected to continue. This will result in tremendous growth in the stock price. This active approach to grow revenue has been driving the price of Amazon stock.
Strong Management Team and Strong Balance Sheet
The management team at Amazon has been providing tremendous leadership to the company. Over the years, the management team has been focused on increasing revenue. The team has also been focused on investing in growth. The portfolio of investments has led to more revenue for the company. These efforts have resulted in tremendous growth in revenue. In fact, the revenue has grown by 42% in the last fiscal year. Similarly, the EBITDA has also been increasing exponentially. This has resulted in increasing the shareholders’ value. The EBITDA has grown by 60% in the last fiscal year. These efforts have led to the price of Amazon stock growth.
What Trends Are Driving the Price of Amazon Stock?
The next trend that could drive the price of Amazon stock is the investments on artificial intelligence and robotics. The investments on artificial intelligence and robotics will help Amazon to improve the product recommendations on its platform. The product recommendations will lead to more revenue for Amazon. Similarly, the investments on automated warehouses will also lead to improvement in delivery time. These efforts will lead to tremendous growth in revenue. The revenue and EBITDA have been growing exponentially. These efforts have resulted in the value of the company increasing, and a possible listing of Amazon in the Dow Jones.
Conclusion
In conclusion, the key reasons behind the growth in the Amazon stock price are the investments on artificial intelligence and robotics, the product recommendations, and improvements in delivery time. These efforts will lead to tremendous growth in revenue. The revenue and EBITDA have been growing exponentially. These efforts have resulted in the value of the company increasing. These efforts will lead to the price of Amazon stock growth in the future.
