If you’re looking for a blowout success story reflecting this year’s unique circumstances, look no further than mega-cap Amazon (AMZN).
The e-commerce giant has benefited immensely from the Covid-19 driven environment and has made all the right moves; Amazon has responded almost flawlessly to the outsized demand, delivering massive sales and profits in the process.
However, with the real prospect of a Covid vaccine becoming widely available in the relatively near future, are we about to see the new-old paradigm have a negative effect on Amazon?
Unlikely, according to Tigress analyst Ivan Feinseth. There are just too many reasons to back Amazon’s continued success.
That said, if we had to point out one weakness from Amazon’s recent blowout earnings, it would be the Q4 guidance, which came in below expectations.
“However,” Feinseth retorts, “Q4 will be helped by another successful Prime Day, where total sales surpassed $10.4 billion, up over 45% from the $7.16 billion sales during Prime Day 2019.” The event’s ongoing success, says Feinseth, highlights its “strong sales momentum” and points to “a very strong holiday season.”
While Covid-19 has undoubtedly accelerated growing e-commerce trends of which Amazon has been a prime beneficiary, it is far from Amazon’s only growth driver. Look no further than Amazon Web Services (AWS) as an example. The platform continues to add new features, keeps “increasing its infrastructure and service networks and incorporating more advanced AI capabilities and other additional tools to build and run extremely complex applications.”
Throw into the mix the recent launch of Amazon One which allows for contactless payments and identification through palm recognition, and a move into the fitness tracking market with the Halo wellness band and app. And the icing on the cake? A balance sheet with $52.71 billion in excess cash to “fund ongoing innovation and key growth initiatives.”
It is no surprise to learn, then, that the 5-star analyst rates Amazon a Strong Buy. Feinseth, however, has no fixed price target in mind. (To watch Feinseth’s track record, click here)
Across the Street, there is one lone analyst who currently rates Amazon a Hold. All 36 other recent reviews, however, say Buy. AMZN's Strong Buy consensus rating is backed by a $3,818.46 average price target which suggests upside of 22% in the year ahead. (See Amazon stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.