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Amazon (AMZN) Stock Looks Like A Buy Ahead of Q3 Earnings
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At this point, some might think it’s too late to buy Amazon (AMZN - Free Report) stock since its run of absolutely insane growth is over. But Amazon’s days of impressive expansion don’t look like they are done just yet. And now might be a good time to think about buying AMZN stock before Amazon reports its Q3 financial results on Thursday, October 25.
Where Can Amazon Grow?
Amazon at its core is still an e-commerce firm. Yet, at a time when most other retailers, from Target (TGT - Free Report) to Walmart (WMT - Free Report) race to bolster their online platforms, Amazon has jumped into brick-and-mortar.
Amazon recently launched its latest physical retail store called “Amazon 4-star” in New York City’s trendy SoHo neighborhood. Jeff Bezos’ firm essentially rolled out a physical version of its online platform, featuring only the most popular items.
On top of 4-star, Amazon has expanded its retail presence beyond its Whole Foods purchase. Amazon opened its first bookstore in 2015 and now boasts over 15 Amazon Books locations throughout the U.S., with plans to open more. Furthermore, the e-commerce power runs four cashierless convenience store-style, Amazon-Go locations along with pop-up stores.
Amazon reported physical stores sales of $4.31 billion last quarter, which accounted for about 8% of total Q2 revenues.
The Seattle-based company understood that online retail was the wave of the future long before many others, it also knows that the right kind of physical retail can still thrive.
Another potential growth area for Amazon is it advertising business. The company is expected to grab 4.1% of the total domestic digital ad spend this year to move into third-place behind Google (GOOGL - Free Report) and Facebook , according to an eMarketer report. Amazon only claims a tiny percentage of ad dollars compared to its peers, but the e-commerce firm is projected to see its share of U.S. digital ad spending climb to 7% by 2020 to hit $10.92 billion.
What Else?
Amazon is still by far the biggest cloud computing firm, with its high-margin AWS business jumping 49% to $6.12 billion in the second quarter. Amazon held the top spot in terms of market share at 34%, which came in well-above second-place Microsoft’s (MSFT - Free Report) 14%, IBM’s (IBM - Free Report) 8%, Google’s 6%, and Alibaba’s (BABA - Free Report) 4%, according to Synergy Research Group.
Investors should also know that the Amazon Prime-heavy subscription business surged 55% to reach $3.41 billion in Q2. Beyond shipping and delivery deals, users have access to Amazon Prime Video, which competes directly against Netflix (NFLX - Free Report) . The firm has reportedly committed to spend $5 billion a year on original and licensed content as the streaming war heats up.
Amazon, unlike Netflix and Hulu, has also jumped into live sports. This push includes deals with the NFL and the English Premier League. Looking ahead, Amazon seems ready to take on newcomers Disney (DIS - Free Report) , Apple (AAPL - Free Report) , and AT&T (T - Free Report) when they launch their streaming services over the next few years.
Q3 Outlook
Our current Zacks Consensus Estimate is calling for Amazon’s Q3 revenues to jump by 30.2% to hit $56.97 billion. The firm’s full-year revenues are projected to climb by nearly 32% to reach a mind-blowing $234.33 billion.
Meanwhile, at the other end of the income statement, AMZN’s adjusted third-quarter revenues are expected to skyrocket over 532% to touch $3.29 per share. Amazon’s adjusted full-year EPS figure is expected to expand by over 290%.
Investors should note that historically there has been a ton of variance in Amazon’s earnings. But it seems that Amazon could become more profitable even as it continues to spend in order to jump into new growth areas.
Bottom Line
AMZN has seen its earnings revisions picture trend upward over the last seven days, which helps Amazon earn a Zacks Rank #2 (Buy). The company also sports an “A” grade for Growth in our Style Scores system.
It is also worth noting that Amazon closed Wednesday at $1,831.73 per share, which marked a roughly 11% discount compared to its 52-week high. Therefore, it seems like now might not be a bad time to think about buying Amazon stock, especially ahead of earnings.
Amazon is scheduled to report its third quarter 2018 financial results on Thursday, October 25.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Amazon (AMZN) Stock Looks Like A Buy Ahead of Q3 Earnings
At this point, some might think it’s too late to buy Amazon (AMZN - Free Report) stock since its run of absolutely insane growth is over. But Amazon’s days of impressive expansion don’t look like they are done just yet. And now might be a good time to think about buying AMZN stock before Amazon reports its Q3 financial results on Thursday, October 25.
Where Can Amazon Grow?
Amazon at its core is still an e-commerce firm. Yet, at a time when most other retailers, from Target (TGT - Free Report) to Walmart (WMT - Free Report) race to bolster their online platforms, Amazon has jumped into brick-and-mortar.
Amazon recently launched its latest physical retail store called “Amazon 4-star” in New York City’s trendy SoHo neighborhood. Jeff Bezos’ firm essentially rolled out a physical version of its online platform, featuring only the most popular items.
On top of 4-star, Amazon has expanded its retail presence beyond its Whole Foods purchase. Amazon opened its first bookstore in 2015 and now boasts over 15 Amazon Books locations throughout the U.S., with plans to open more. Furthermore, the e-commerce power runs four cashierless convenience store-style, Amazon-Go locations along with pop-up stores.
Amazon reported physical stores sales of $4.31 billion last quarter, which accounted for about 8% of total Q2 revenues.
The Seattle-based company understood that online retail was the wave of the future long before many others, it also knows that the right kind of physical retail can still thrive.
Another potential growth area for Amazon is it advertising business. The company is expected to grab 4.1% of the total domestic digital ad spend this year to move into third-place behind Google (GOOGL - Free Report) and Facebook , according to an eMarketer report. Amazon only claims a tiny percentage of ad dollars compared to its peers, but the e-commerce firm is projected to see its share of U.S. digital ad spending climb to 7% by 2020 to hit $10.92 billion.
What Else?
Amazon is still by far the biggest cloud computing firm, with its high-margin AWS business jumping 49% to $6.12 billion in the second quarter. Amazon held the top spot in terms of market share at 34%, which came in well-above second-place Microsoft’s (MSFT - Free Report) 14%, IBM’s (IBM - Free Report) 8%, Google’s 6%, and Alibaba’s (BABA - Free Report) 4%, according to Synergy Research Group.
Investors should also know that the Amazon Prime-heavy subscription business surged 55% to reach $3.41 billion in Q2. Beyond shipping and delivery deals, users have access to Amazon Prime Video, which competes directly against Netflix (NFLX - Free Report) . The firm has reportedly committed to spend $5 billion a year on original and licensed content as the streaming war heats up.
Amazon, unlike Netflix and Hulu, has also jumped into live sports. This push includes deals with the NFL and the English Premier League. Looking ahead, Amazon seems ready to take on newcomers Disney (DIS - Free Report) , Apple (AAPL - Free Report) , and AT&T (T - Free Report) when they launch their streaming services over the next few years.
Q3 Outlook
Our current Zacks Consensus Estimate is calling for Amazon’s Q3 revenues to jump by 30.2% to hit $56.97 billion. The firm’s full-year revenues are projected to climb by nearly 32% to reach a mind-blowing $234.33 billion.
Meanwhile, at the other end of the income statement, AMZN’s adjusted third-quarter revenues are expected to skyrocket over 532% to touch $3.29 per share. Amazon’s adjusted full-year EPS figure is expected to expand by over 290%.
Investors should note that historically there has been a ton of variance in Amazon’s earnings. But it seems that Amazon could become more profitable even as it continues to spend in order to jump into new growth areas.
Bottom Line
AMZN has seen its earnings revisions picture trend upward over the last seven days, which helps Amazon earn a Zacks Rank #2 (Buy). The company also sports an “A” grade for Growth in our Style Scores system.
It is also worth noting that Amazon closed Wednesday at $1,831.73 per share, which marked a roughly 11% discount compared to its 52-week high. Therefore, it seems like now might not be a bad time to think about buying Amazon stock, especially ahead of earnings.
Amazon is scheduled to report its third quarter 2018 financial results on Thursday, October 25.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>