1. What is the Amazon P/E Ratio?

The Price-to-Earnings (P/E) ratio is a valuation metric that compares Amazon's (AMZN) stock price to its earnings per share (EPS). It helps investors assess whether a stock is overvalued or undervalued relative to its earnings.

2. How Does the Calculator Work?

The calculator uses the P/E ratio formula:

Where:

• AMZN Price — Current stock price of Amazon in USD
• AMZN EPS — Earnings per share of Amazon in USD

Explanation: The ratio shows how much investors are willing to pay per dollar of Amazon's earnings.

3. Importance of P/E Ratio

Details: The P/E ratio is crucial for comparing Amazon's valuation to competitors, assessing growth expectations, and making investment decisions.

4. Using the Calculator

Tips: Enter Amazon's current stock price and its earnings per share (EPS) in USD. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a good P/E ratio for Amazon?
A: A "good" P/E depends on growth prospects. Amazon typically has a higher P/E due to growth expectations compared to more mature companies.

Q2: How often should I check Amazon's P/E ratio?
A: Regularly, especially before making investment decisions, as both price and earnings change quarterly.

Q3: Why might Amazon's P/E ratio be high?
A: High P/E may indicate investors expect future earnings growth or that the stock is overvalued.

Q4: What's the difference between trailing and forward P/E?
A: Trailing P/E uses past earnings, while forward P/E uses estimated future earnings.

Q5: Where can I find Amazon's EPS data?
A: From Amazon's quarterly earnings reports or financial websites like Yahoo Finance or Bloomberg.