Amazon’s Stock Soars: A Closer Look at Recent Performance
E-commerce Leader outperforms Market and Setbacks
Amazon.com, Inc. (AMZN), based in Seattle, Washington, leads as the largest online retailer worldwide and operates numerous marketplaces. The company’s offerings range from consumer products to advertising and subscription services, both online and in physical locations. With a notable market cap of $2.2 trillion, its diverse products include books, music, electronics, and more. Additionally, Amazon provides personalized shopping experiences, web-based credit card payments, and direct shipping, along with a global cloud platform.
Impressive Gains Against Market Benchmarks
In the past year, Amazon’s stock has significantly outperformed the broader market. The company saw a gain of 44.1%, significantly exceeding the S&P 500 Index’s rise of nearly 35.9%. So far in 2024, AMZN shares have risen by 36.1%, again outperforming the S&P 500, which increased by 25.8% year-to-date.
Looking at a narrower focus, AMZN has been outperformed by the ProShares Online Retail ETF (ONLN), which has surged by about 48.8% in the past year. Nevertheless, AMZN’s year-to-date performance eclipses ONLN’s gain of 26.5% over the same period.
Key Drivers Behind Amazon’s Success
Several factors have fueled Amazon’s robust performance. The growth of its advertising technology, the success of Amazon Web Services (AWS) in cloud computing, and the strategic acquisition of Whole Foods Market stand out. Notably, Amazon’s data capabilities have contributed to the launch of its new shopping assistant called Rufus, which positively impacts ad revenues. Moreover, AWS’s partnership with Comviva, combined with Amazon’s Prime program and its extensive distribution network, has enhanced its online retail success. The Whole Foods acquisition has broadened Amazon’s footprint in the physical grocery sector.
Q3 Results and Future Expectations
On October 31, AMZN shares dipped over 3% following the release of its Q3 earnings report. The company reported earnings per share (EPS) of $1.43, surpassing Wall Street’s expectations of $1.14. Its revenue reached $158.9 billion, exceeding forecasts of $157.1 billion. For Q4, Amazon anticipates revenue between $181.5 billion and $188.5 billion.
Outlook for Fiscal Year and Analyst Ratings
Analysts project an impressive EPS growth of 85.6% for the current fiscal year, which ends in December, estimating it will reach $5.27 on a diluted basis. Amazon has a history of exceeding earnings expectations, having done so in each of the last four quarters.
Among the 49 analysts examining AMZN stock, the consensus rating is a “Strong Buy,” which reflects 45 “Strong Buy” ratings, three “Moderate Buys,” and one “Hold.” This optimism has increased from a month ago, when 43 analysts favored a “Strong Buy.”
Analyst Insights and Pricing Targets
On November 1, Citigroup Inc. (C) analyst Ronald Josey reaffirmed a “Buy” rating and raised the price target for AMZN to $252, suggesting a potential upside of 21.8% from its current levels. The average price target across analysts is $236.78, indicating a 14.5% premium to Amazon’s current price. Notably, the highest price target is $285, which suggests potential upside of 37.8%.
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On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
