Amazon (AMZN) turns costlier on growth prospects

Amazon.com Inc. (NASDAQ: AMZN) turned costlier as the stock has soared to a record high of $2,133.81 on Monday. Investors remained positive about the future of the e-commerce giant backed by the market presence and growth prospects. This comes on heels after last week’s report that the company would create more than 15,000 jobs in the Seattle suburb and is considering selling a service that would be based on Twitch’s live-streaming technology.

Amazon continues to rule the e-commerce sector with its market dominance and change in consumer habits. The market experts believe that the company is becoming one of the best long-term investment options. The habits of the shoppers have changed from looking into Google (NASDAQ: GOOGL) to Amazon as the first option of search and compare prices.

The change in habits has turned out to be an attraction for advertisers who prefer Amazon ad platform for increasing their customer base. This has lifted Amazon’s advertising revenue. The analysts expect that the e-commerce giant turned beneficial from the loss of advertising market share of Google and other players.

The company continues to expand its horizon in terms of geographic wise as well as adding new products and features under its hood. Also, Amazon has been seeing an increase in the participation of third-party sellers in its one-day delivery program as the year progresses. This is likely to continue in 2020.

Despite the revenue growth trend, the company continues to incur costs related to the volume expansion, delivery program, and sales and marketing. The expansion of the one-day shipping program globally is expected to increase the costs but the company expects it to be a little more balanced one as the year progresses.

During January end, the company reported a 21% jump in the top line for the fourth quarter driven by holiday season sales as well as the transition of Prime from two days to one day. The company experienced continued growth of demand for the products and services offered by it and its sellers despite impacting by general economic and business conditions globally.

Read: Near-term concerns weigh on Alphabet stock

As of December 31, 2019, the company had cash and cash equivalents of $36.09 billion while the total debt stood at $77.54 billion. When considering operating cash flow of $19.66 billion for the fourth quarter, the company is likely to repay its total debt within the next four years.

The stock, which has risen over 19% in the past three months, has been trading between $1,566.76 and $2,133.81 for the past 52 weeks. This is much better than the 50-day and 200-day moving average of $1,900.24 and $1,812.46, respectively.

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