Amazon (AMZN) / Jeff Bezos 02 (Nov 18 - Dec 26)

[winston]

not vested

Amazon Inc. – Longer term remains attractive
PSR Recommendation: ACCUMULATE
Target Price: 117

Revenue was in line with expectations at 101% of our FY22 forecast; while earnings were a slight miss with normalized PATMI at 96%, excluding a pre-tax valuation loss of US$12.7bn from Rivian Automotive, due to higher-than-expected operating expenses.

4Q22 revenue grew 8.6% YoY, beating top-end company guidance with advertising continuing to buck the industry’s declining trend.

AWS remains the fastest growing segment but growth is expected to decelerate to mid-teens in 1Q23.

We upgrade to ACCUMULATE with a raised DCF target price of US$117.00 (prev. US$108.00) using a WACC of 6.4% and terminal growth rate of 5%.

We expect near-term challenges for revenue growth as consumers are more selective in their discretionary spending and AWS customers opt for lower-cost products.

However, we expect growth to reaccelerate in FY24e, particularly for AWS as Amazon increases its client base and customers scale up their computing demand as macro improves.

Source: Phillips

https://www.stocksbnb.com/reports/amazo ... ttractive/

[behappyalways]

Amazon 'Pauses' HQ2 Construction In Virginia Amid Sweeping Job Cuts
https://www.zerohedge.com/political/ama ... g-job-cuts

[winston]

not vested

Amazon now ‘solidly a top pick’ at Goldman Sachs

Concerns of an AWS slowdown are overwrought while e-commerce margins look as though they will improve into 2023.

Source: Seeking Alpha

https://seekingalpha.com/news/3944824-a ... _breakfast

[winston]

not vested

This Stock is Offering an Excellent Entry Point (and the Market is Sleeping On It)

Amazon has been looking to make a mark in healthcare. The company’s ventures haven’t always been highly successful.

Source: The Motley Fool

https://tradesoftheday.com/2023/03/16/t ... ing-on-it/

[behappyalways]

Amazon Prepares To Fire Another 9,000 Workers
https://www.zerohedge.com/markets/amazo ... 00-workers

[winston]

not vested

Amazon

The biggest headwind Amazon is currently contending with is the growing likelihood that the U.S. will fall into a recession at some point within the next year.

But here’s the interesting thing about Amazon that far too many investors may be overlooking: Even though online retail sales accounts for a significant percentage of Amazon’s total sales, it’s a relatively small percentage of cash flow and operating income.

Three of Amazon’s ancillary segments are responsible for most of its cash-flow generation, and they’re all continuing to grow by a sustained double-digit rate.

Amazon Web Services (AWS) is easily the company’s most valuable operating segment from the standpoint of cash flow and future profits. AWS accounts for close to a third of the world’s cloud infrastructure spending, which is an enviable position to be in with enterprise cloud spending still in its infancy. Despite AWS generating around a sixth of Amazon’s annual sales, it’s consistently producing more than half of the company’s operating income.

The second key ancillary division is advertising services. The company’s leading online marketplace draws well over 2 billion monthly visitors. Merchants wanting to target their products or message(s) are wisely advertising with Amazon. Excluding currency fluctuations, advertising services saw year-over-year sales growth of 21% to 30% over the past four quarters.

The third segment of importance is subscription services. Amazon announced nearly two years ago that it had surpassed 200 million Prime members globally, but it hasn’t updated this figure since. Considering that the company holds the exclusive rights to Thursday Night Football and garners more than 2 billion visits each month, it’s a fair assumption this figure has increased. Subscription services are bringing in close to $37 billion in annual run-rate sales.

While Amazon isn’t cheap based on the traditional price-to-earnings ratio, it’s cheaper than it’s ever been as a publicly traded company relative to Wall Street’s future cash flow forecast.

Source: Daily Trade Alert

[winston]

not vested

Amazon

The reason Amazon lost as much as half of its value since hitting an all-time high, was the expectation that online sales would slow due to both the ongoing bear market in stocks and the growing likelihood of a U.S. recession.

E-commerce is a generally low-margin operating segment that serves a more important purpose as a jumping-off point to the ancillary segments that generate the bulk of its cash flow and profits.

Amazon Web Services (AWS), - 32% of all cloud infrastructure service spending during the fourth quarter.

Even though AWS generates about a sixth of Amazon’s net sales, it’s consistently responsible for 50% to 100% of the company’s operating cash flow.

The popularity of Amazon’s low-margin online marketplace has also been the springboard for the success of its subscription services segment. In April 2021, Amazon announced it had surpassed 200 million global Prime subscribers.

With modest growth in its marketplace since then, along with gaining the exclusive rights to Thursday Night Football, it’s extremely likely the company’s subscriber count has continued to climb.

The point is that even if Amazon’s online retail sales stagnate or fall, it could still deliver sustained, double-digit cash flow growth thanks to its higher-margin ancillary operations.

Since Amazon reinvests most of its cash flow back into its business, cash flow is a better measure of “value” than the traditional price-to-earnings (P/E) ratio.

Right now, Amazon is cheaper than it’s ever been relative to Wall Street’s future cash flow projections for the company.

Source: Daily Trade Alert

[winston]

not vested

Amazon

Revenue increased just 9% last year to $514 billion.

The company posted an adjusted loss of $0.27 per share as compared to a profit of $3.24 per share in the prior year. However, 2023 is expected to be a turnaround year for Amazon as far as its bottom line is concerned.

The company’s top-line growth is also expected to gather momentum, growing in the high single digits in 2023 and then in the double-digits from next year.

A slight improvement in the e-commerce market’s prospects, robust growth in cloud spending, and Amazon’s growing influence in the advertising business, are some of the reasons the company’s fortunes should start picking up.

For instance, Amazon should benefit from easier comps in the e-commerce business in 2023. The global e-commerce market grew by just 7.1% in 2022 following a 16.8% increase in 2021. The market is expected to grow at a slightly better pace of 8.9% in 2023.

Meanwhile, global cloud infrastructure spending is anticipated to jump an impressive 23% this year, according to Canalys. Amazon’s 32% share of this market makes it the leader in the cloud infrastructure services space and puts the company on track to make the most of the solid growth opportunity available there.

Investors, however, should note that emerging tech trends such as generative artificial intelligence (AI) could help Amazon record faster growth in 2023 and beyond. Generative AI company Stability AI, which is known for its popular text-to-image model Stable Diffusion, has made Amazon Web Services (AWS) its preferred provider of cloud services. Stability AI will use AWS to scale and build its generative AI model.

Given that the generative AI market is expected to clock rapid annual growth of 34% through the end of the decade, demand for cloud-enabled AI services should increase at a nice pace. Mordor Intelligence estimates that the cloud AI market could grow at 22% a year through 2027, and Amazon’s share of this market means that it could become a big beneficiary of this terrific growth.

The stock is trading at just 2 times sales, a discount to the S&P 500’s price-to-sales ratio of 2.4.

Source: Trade Of The Day

[winston]

not vested

Amazon, Inc. (AMZN) is up on deck with its first-quarter earnings results after market close on Thursday, April 27.

Analysts estimate earnings of $0.22 per share, up from earnings loss of $0.38 per share in the same quarter a year ago.

Revenue is expected to increase 7% year-over-year to $124.6 billion.

Source: Investor Place

[behappyalways]

Amazon Erases 12% Gain, Turns Red After Revealing Sharp Slowdown In April AWS Growth
https://www.zerohedge.com/markets/amazo ... ing-higher