![]() In addition, investors should note the latest research note from Deutsche Bank analyst Lee Horowitz and team, which highlights that - according to insights mapped on Sensortower data - Amazon's web traffic in Q1 2023 is trending materially below the historical pre-COVID average, a trend that has been further supported by the banking crisis. ![]() household, which implies a sharp deterioration in consumption sentiment since the end of 2022. ![]() However, I argue that estimating a 7% YoY revenue expansion and an approximate $0.5 EPS improvement versus Q1 2022 might still be too optimistic, considering the evidence in the context of a weakening consumer sentiment/spending, as well as a slowdown in the cloud business.īuilding a bearish argument on Amazon's retail business, including e-commerce and nascent brick-and-mortar sales, I would like to point out the latest BofA research on credit and debit card spending per U.S. Referencing the earnings preview, it is clear that analysts are starting to turn increasingly bearish on the e-commerce giants' business, and are downgrading their expectations. Seeking Alpha Estimates Might Be Too Optimistic This trend is evident for both Amazon's topline. Referencing consensus analyst expectations, I would like to point out that revenue estimates have steadily deteriorated during the past 12 - 14 months, with sales expectations now being approximately 20% below September 2021 estimates. Additionally, analysts have provided EPS estimates ranging from $0.1 to $0.32, with an average of $0.22, which would indicate a material improvement versus the $0.38 loss in Q1 2022. Assuming the average analyst consensus estimate as a benchmark, it is suggested that Amazon's Q1 2023 sales may increase by around 7% as compared to the same period one year earlier. They expect total sales to be between $120 billion and $128.7 billion, with an average estimate of $124.6 billion. ![]() Personally, I continue to view AMZN stock as overvalued and a weaker-than-expected Q1 report might pressure the stock to trade lower - towards a more reasonable value based on fundamentals, which I see at around $70.65/share ( target price ).įor reference, Amazon stock is a relative outperformer YTD: AMZN shares are approximately 25% since January, as compared to a gain of about 10% for the S&P 500 ( SPY).Īccording to data from Seeking Alpha, as of April 24th, 37 analysts have provided their estimates for Amazon's Q1 results. So, being neither a growth nor a value company, Amazon stock remains a difficult pitch. In my opinion, Amazon's Q1 report will once again reveal that Amazon is slowly transitioning away from being a growth company, while the conglomerate must yet prove adequate profitability to justify its current $1,100 billion market cap. There is much evidence that the macro economy continues to pressure the e-commerce giant's consumer business, while inflationary trends pressure the labour-heavy cost structure, while a slowdown in AWS is expected to have continued throughout the January quarter of 2023. I am worried about Amazon's ( NASDAQ: AMZN) Q1 2023 report, which is expected to be released on Wednesday 26th after market close.
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