Key Points
Amazon’s retail business has improved its operating margin over the past few years, helped by robotics.
Operating cash flow grew 29% to $168 billion over the past 12 months.
The stock trades at about 16 times operating cash flow, near its lowest multiple since 2008.
Most of the attention on Amazon(NASDAQ: AMZN) goes to its cloud business, Amazon Web Services (AWS). But the company’s online stores are quietly becoming more profitable, thanks to automation and robotics. That’s a big reason the stock can keep rising through 2035.
On the third-quarter earnings call, CEO Andy Jassy said, “There has never been a business with a trillion dollars of annual revenue. Amazon is on a path to have two of them in AWS and stores.” He added that some folks are “sleeping a bit” on how much progress the retail business has made.
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