Amazon.com Inc. (NASDAQ:AMZN)

The Price to Operating Profit (P/OP) ratio, calculated from the provided financial information, exhibits considerable fluctuation over the observed period from 2006 to 2026. Initially, the ratio demonstrates an increasing trend, followed by periods of volatility and, ultimately, a return towards lower values in more recent years.

Initial Increasing Trend (2006-2008)

From 2006 to 2008, the P/OP ratio increased from 37.83 to 47.85. This suggests that the market valuation relative to operating profit was rising during this period. The increase, while present, was relatively moderate.

Volatility and Peak (2009-2015)

The period between 2009 and 2015 is characterized by significant volatility. The ratio decreased to a low of 29.93 in 2009 before experiencing substantial increases, peaking at an exceptionally high value of 925.12 in 2014. This peak is likely attributable to a disproportionate increase in share price relative to operating profit per share, potentially reflecting investor expectations or market sentiment. Following the peak, the ratio decreased substantially in 2015 to 123.77.

Moderation and Decline (2016-2026)

From 2016 onwards, the P/OP ratio demonstrates a more moderate trend, generally declining. The ratio decreased from 123.77 in 2016 to 28.23 in 2026. While fluctuations are still present, the magnitude of change is considerably less than that observed between 2009 and 2015. The ratio in 2026 represents a return to levels comparable to those seen in the earlier part of the observed period.

Relationship to Underlying Components

The fluctuations in the P/OP ratio closely mirror the movements in both share price and operating profit per share. The dramatic increase in 2014 coincided with a relatively stable operating profit per share and a significant increase in share price. Conversely, the declines in the ratio in 2015 and subsequent years are associated with either decreases in share price or increases in operating profit per share, or a combination of both.

In summary, the P/OP ratio has experienced a dynamic evolution over the period examined. The initial growth was followed by a period of extreme volatility, culminating in a substantial peak, and then a subsequent moderation and decline towards levels seen earlier in the timeframe. The ratio’s movements are strongly correlated with changes in both share price and operating profit per share.