Amazon.com, Inc. (AMZN)vs Rocket Lab USA, Inc. (RKLB)

Quick verdict

Amazon.com, Inc. (AMZN) and Rocket Lab USA, Inc. (RKLB) appeal to different investors. On our six-factor framework, AMZN scores 3 and RKLB scores 3. AMZN looks cheaper on the multiples that matter, while RKLB grows faster and RKLB earns higher returns on capital. The two are evenly matched overall, so your priority — value, growth, income or safety — should decide it.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Amazon.com, Inc. operates in Specialty Retail (Consumer Cyclical), while Rocket Lab USA, Inc. sits in Aerospace & Defense (Industrials). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. AMZN carries a beta of 1.46 versus 1.77 for RKLB, meaning RKLB has historically been the more volatile of the two.

Valuation

On valuation, AMZN is the cheaper stock. AMZN trades on a forward P/E of 45.95 and EV/EBITDA of 12.07, against 28.52 and 23.55 for RKLB. Price-to-sales is 3.77 vs 12.12, and free-cash-flow yield is 2.0% vs 1.5%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

RKLB is the faster grower. AMZN has compounded revenue at 12.4% over three years with EPS growth of 28.8%, while RKLB has delivered 29.4% revenue and 24.7% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, RKLB is stronger. AMZN posts a 12.1% operating margin, 30.5% return on equity and 8.5% return on invested capital. RKLB posts 42.8%, 13.4% and 9.7% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

RKLB has the safer balance sheet. AMZN carries net-debt/EBITDA of 0.86x with a current ratio of 1.03, versus -0.37x and 3.25 for RKLB. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year AMZN returned 4.0% against 25.4% for RKLB; on a three-year annualised basis it is 42.8% vs 8.2%. AMZN yields 0.0% and RKLB yields 0.0%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, AMZN is the better fit on today's multiples. Growth investors will likely prefer RKLB, which is expanding faster. Income investors should lean toward AMZN for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour RKLB for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: AMZN
• Growth: RKLB
• Income: AMZN
• Quality: RKLB

Frequently asked questions

Is AMZN or RKLB the better buy right now?

Neither is universally "better." AMZN scores 3 and RKLB scores 3 on our six-factor framework. AMZN is cheaper, RKLB grows faster, and RKLB is higher quality — so the right pick depends on your objective.

Which stock is cheaper, AMZN or RKLB?

AMZN is the cheaper stock across forward P/E (45.95 vs 28.52), EV/EBITDA (12.07 vs 23.55) and price-to-sales (3.77 vs 12.12).

Which has grown faster, AMZN or RKLB?

RKLB has the stronger growth profile, with three-year revenue CAGR of 12.4% for AMZN versus 29.4% for RKLB.

Which stock pays a bigger dividend?

AMZN yields 0.0% and RKLB yields 0.0%, so AMZN is the stronger income choice.

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