Financial Trading Blog
Stock of the day 19/10/2015 – Amazon.com Inc
Will the figures be a Prime cut, or will investors want to cancel their order?
The ubiquitous online retailer hit an all-time high of $591.37 in the aftermath of its Q2 results back in July, when it soared 16% after the company posted better than anticipated revenue of $23.18 billion alongside EPS of $0.19. It was the latter figure that really got Amazon firing at full power, with analysts having forecast a loss of $0.14 per share.
(Source: IT-Finance.com 19/10/2015)
Since then Amazon has had to deal with a few issues that would have perhaps caused lesser stocks to crumble. First was the aforementioned scandal at the start of August, with a New York Times article revealing some nasty workplace practices and pressures at all levels of the company’s hierarchy. Then there was the chaos of August and, to a lesser extent, September, with the China-inspired losses eating huge chunks out of the market. Yet Amazon breezed through both of these situations basically unscathed, and with the added bonus of WalMart announcing a profit warning that arguably has arisen from the cost of the brick-and-mortar shopping giant taking on the online monolith, the stock is just below (well for a company that can move as quickly as Amazon) its all-time high at a current trading price of $569.89 (IT-Finance.com, 19/10/2015).
Yet like its tech siblings Netflix and Google (sorry, Alphabet) Amazon carries with it some hefty expectations. And as seen with Netflix last week, it doesn’t take a lot for these mega stocks to go from market-darlings to haemorrhaging 15-20% in a day; what investors want to see and what investors don’t want to see from these stocks is normally balanced on a knife-edge, the extent of which often isn’t found until the markets react post-announcement. In terms of specifics, analysts are forecasting a net loss of $0.14 per share alongside revenue of $24.9 billion, making those the figures to beat if Amazon wants to impress.
Amazon.com Inc has a consensus rating of ‘Buy’ with an average target price of $610.19.
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