Followers | 686 |
Posts | 143297 |
Boards Moderated | 35 |
Alias Born | 03/10/2004 |
Tuesday, September 12, 2023 9:25:13 AM
By: Zacks Investment Research | September 12, 2023
Amazon (AMZN), the world's leading ecommerce and cloud services provider, is benefiting from strong growth across its business segments, boosting analysts’ expectations for the stock and giving it a Zacks Ranks #1 (Strong Buy) rating.
Notable developments at Amazon include continued growth in Amazon Prime users, a reacceleration of cloud service sales growth as businesses shift their focus from cost-cutting to workload expansion, and huge advances in its burgeoning advertising business.
In addition to the multitude of business progresses at Amazon, the stock is also breaking out from a compelling technical chart pattern. These bullish catalysts make Amazon one of the most appealing stocks in the market today.
Earnings Climb Aggressively Higher
At its most recent quarterly earnings report, Amazon crushed analysts’ estimates. Earnings of $0.65 per share were 89.5% above expectations of $0.34 per share, while sales of $134.4 billion surprised to the upside by 2.3% and showed an 11% YoY increase.
North America revenues (61% of sales) rose 11% YoY, International revenues (22% of sales) increased 10%, and Amazon Web Services revenues (17% of sales) rose 12% YoY.
Amazon is having incredible success with its newer Advertising business, which is suddenly bringing in $10 billion a quarter. The margins for this business are very high and it is growing 22% annually. Even more impressive is that the advertising business is growing rapidly while incumbent advertising businesses like Meta Platforms and Alphabet deal with slowdowns.
Following such stellar quarterly results and strong business momentum, analysts have unanimously upgraded Amazon’s earnings expectations. Current quarter earnings estimates have been revised higher by 49% and are projected to climb 190% YoY to $0.58 per share. FY23 earnings estimates have been lifted by 43% and are forecast to grow 214% YoY to $2.23 per share.
EPS are expected to grow at nearly 34% annually over the next 3-5 years, while sales are expected to grow more than 10% annually over the next two years.
Image Source: Zacks Investment Research
Technical Setup
Amazon stock has been trading sideways and building out a convincing bull flag over the last 6 weeks. On Monday, the stock broke out above the upper bound of the range, signaling a breakout. So long as the stock doesn’t trade back into the trading range, AMZN should continue higher into the year end.
Image Source: TradingView
Valuation
Amazon has been one of the best performing stocks ever, compounding at 32% annually since its IPO. Additionally, it has always carried a very high, and somewhat confusing earnings multiple, because of the slim margins in e-commerce and huge reinvestment opportunities.
However, now that the company has matured significantly, it is a bit easier to understand the business model, and it now boasts one of the most reasonable earnings multiples in the company’s history.
Today, Amazon is trading at a one year forward earnings multiple of 62x which is above the industry average of 33x but is well below its 20-year median of 80x.
Image Source: Zacks Investment Research
Bottom Line
Amazon remains one of the market’s preeminent technology stocks. It continues to dominate both the e-commerce and cloud services industries, which are some of the fastest growing industries in the world and is innovating new businesses such as advertising like it is in start up mode.
Furthermore, it is likely to be a major beneficiary of the Artificial Intelligence revolution. As companies realize the power this new technology offers, they are forced to dramatically increase their computing abilities. Amazon Web Services is going to be a direct recipient of this new demand for processing power.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent AMZN News
- TSMC July Revenue Surges 45%, Nasdaq Accelerates Penny Stock Delistings, Moody’s Downgrades Intel to BAA1, and More • IH Market News • 08/09/2024 09:44:44 AM
- ReFrame and IMDbPro Award the ReFrame Stamp for Gender-Balanced Hiring to 77 of the 200 Most Popular TV and Streaming Series of 2023-24, including Emmy Nominees Abbott Elementary, Fallout, Hacks, Mr. and Mrs. Smith, Reservation Dogs and The Bear • Business Wire • 08/08/2024 03:30:00 PM
- Intel Sued by Shareholders; JPMorgan Raises Chance of Recession; Roblox Blocked in Turkey; Micron Resumes Share Buyback • IH Market News • 08/08/2024 09:48:43 AM
- Joby Aviation Seeks Australian Certification, Arcadium Lithium Projects Suspended Due to Oversupply, and More • IH Market News • 08/07/2024 09:47:32 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/05/2024 08:30:40 PM
- U.S. Stocks May Extend Sell-Off Amid Overseas Weakness • IH Market News • 08/05/2024 01:05:44 PM
- U.S. Index Futures and Oil Prices Plunge on Recession Concerns • IH Market News • 08/05/2024 09:46:20 AM
- Nvidia AI Chip Delays, Mars Eyes Kellanova Acquisition, Berkshire Hathaway’s Cash Surge to $277 Billion • IH Market News • 08/05/2024 09:43:55 AM
- Disappointing Jobs Data, Earnings Lead To Extended Sell-Off On Wall Street • IH Market News • 08/02/2024 08:33:16 PM
- Economic Worries, Disappointing Earnings May Lead To Extended Sell-Off • IH Market News • 08/02/2024 01:07:24 PM
- U.S. Stocks Move Sharply Lower As Data Raises Economic Concerns • IH Market News • 08/01/2024 08:44:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/01/2024 08:06:02 PM
- Amazon.com Announces Second Quarter Results • Business Wire • 08/01/2024 08:01:00 PM
- Form 13F-HR - Quarterly report filed by institutional managers, Holdings • Edgar (US Regulatory) • 07/30/2024 08:12:14 PM
- Futures Pointing To Another Lackluster Session On Wall Street • IH Market News • 07/30/2024 01:23:43 PM
- U.S. Futures Climb Before Fed Meeting; Oil Prices Drop on China Demand Worries • IH Market News • 07/30/2024 10:06:14 AM
- U.S. Stocks Finish Choppy Trading Session Little Changed • IH Market News • 07/29/2024 08:44:00 PM
- Optimism About Tech Earnings, Rate Cut May Lead To Strength On Wall Street • IH Market News • 07/29/2024 01:11:40 PM
- How AI is Transforming Marketing: Key Stocks to Watch in a $40B Industry • PR Newswire (US) • 07/29/2024 12:38:00 PM
- How AI is Transforming Marketing: Key Stocks to Watch in a $40B Industry • PR Newswire (Canada) • 07/29/2024 12:38:00 PM
- U.S. Index Futures Climb Pre-Market as Tech Earnings, Fed Meeting Loom • IH Market News • 07/29/2024 10:25:38 AM
- Apple Delays AI Features, Abbott Shares Plunge 7% After $495M Fine, Philips Soars 10% • IH Market News • 07/29/2024 10:24:10 AM
- Alphabet Unveils AlphaProof and AlphaGeometry 2; OpenAI Tests SearchGPT; Apple Loses Market Share in China • IH Market News • 07/26/2024 10:07:41 AM
- GE HealthCare and AWS Announce Strategic Collaboration to Accelerate Healthcare Transformation With Generative AI • Business Wire • 07/25/2024 12:45:00 PM
- NBA Signs Billion Dollar Broadcast Deal, CrowdStrike Criticized for Insufficient Reward, Honda Shuts Down Chinese Factory • IH Market News • 07/25/2024 10:15:46 AM
Maybacks Global Entertainment and ZEASN Technology Private Ltd. Sign Global Licensing Agreement • AHRO • Aug 8, 2024 7:00 AM
SANUWAVE Will Host a Conference Call on August 13, 2024 at 8:30 AM (ET) to Present Q2 Financial Results • SNWV • Aug 8, 2024 6:59 AM
Kona Gold Beverage Inc. Signs Letter of Intent with Bemax, Inc. to Sell Kona Gold, LLC • BMXC • Aug 7, 2024 10:00 AM
Btab Ecommerce Group, Inc. Launches Investor Connect AI Chatbot for Enhanced Investor Engagement and Lead Generation • BBTT • Aug 7, 2024 9:00 AM
Hydromer, Inc. Announces Preliminary Unaudited Second Quarter 2024 Financial Results and Provides Business Update • HYDI • Aug 7, 2024 8:52 AM
North Bay Resources Announces Mt. Vernon Gold Mine Startup, Sierra County, California • NBRI • Aug 5, 2024 9:00 AM