Holiday sales look good for this Internet retailer. The company walloped earnings estimates, reporting EPS of $0.17 vs. a consensus estimate of -$0.14. The shares currently have a “Strong Buy” rating by 22 analysts.
Amazon (AMZN)
From Cabot Growth Investor
Amazon (AMZN) has found resistance in the 675 to 680 area for the past few weeks, which could be a precursor to a downturn. But with the stock just 1% or so off all-time highs, it’s hard to get overly concerned. All indications are that the holiday shopping season is off to a strong start generally, and for Amazon in particular (Fire tablets were huge sellers last weekend).
One analyst upgraded shares this week, believing the company could become the dominant retailer (online or offline) within five years. (He also projected Amazon’s cloud business could see revenues triple by 2018!)
Separately, the company just expanded its streaming video platform with Showtime and Starz shows, though it will cost Prime members a fee to watch them.
All told, we believe the story (which includes a tapering of spending levels) is very much intact; analysts see earnings rising from about $2 per share to $5.50 next year, and we believe even that could prove conservative. Hold on if you own some, and if you don’t, we’re OK with buying a small position (two-thirds of what you’d normally buy, dollar-wise) around here or on dips.
Michael Cintolo, Cabot Growth Investor, www.cabot.net, 978-745-5532, December 9, 2015