Amazon.com, Inc. (NASDAQ:AMZN) shares edge lower in after-hours trading Thursday, after the retail giant released its second-quarter results, posting revenue of $38 billion, above consensus estimates of $35.34 billion. The beat was driven by acceleration in North America, International, Retail Products, Third Party and Subscription revenues. So why shares are falling? Although Amazon did well on a revenue basis, the company ended up falling short on earnings. For the quarter, Amazon reported earnings per share of $0.40, compared to consensus estimate of $1.42. Looking forward, second-quarter revenue guidance of $39.3-$41.8 billion was in line with consensus of $39.97 billion.
Baird’s top analyst Colin Sebastian noted, “At first glance, Q2 results were positive with respect to top-line performance, and a bit mixed in terms of profit margins. That said, accelerating growth in core Retail and relatively steady growth in AWS underpin our positive long-term view. No change to thesis.” As such, Sebastian reiterates an Outperform rating on Amazon shares, with a price target of $1,100, which represents a potential upside of 5% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Colin Sebastian has a yearly average return of 23.2% and a 77% success rate. Sebastian has a 38.8% average return when recommending AMZN, and is ranked #16 out of 4160 analysts.
Out of the 42 analysts polled in the past 12 months, 39 rate Amazon stock a Buy, while 3 rate the stock a Hold. With a return potential of 5.3%, the stock’s consensus target price stands at $1,101.64.