Amazon.com, Inc. (AMZN) Q3:17 Earnings At First Glance


This afternoon, Amazon.com, Inc. (NASDAQ:AMZN) reported solid third-quarter earnings results that largely beat consensus expectations, and issued positive guidance. Accelerating growth in core retail drove revenue outperformance, while declining retail operating margins were offset by a significant expansion in AWS margins and accelerating growth in high-margin Other revenues (e.g., Advertising).

Revenue in the three months ended in September rose 34%, year over year, to $43.7 billion yielding EPS of $0.52. Analysts had been modeling $42.19 billion and $0.03 per share in earnings.

Looking ahead, the company sees 4Q revenue of $56 billion to $60.5 billion, and operating income of $300 million to $1.65 billion. That compares to consensus for $54.2 billion in revenue and $1.5 billion in operating income.

Amazon’s AWS cloud computing unit saw sales rise 42%, to $4.58 billion, beating consensus estimates of $4.52 billion.

CEO Jeff Bezos commented, “In the last month alone, we’ve launched five new Alexa-enabled devices, introduced Alexa in India, announced integration with BMW, surpassed 25,000 skills, integrated Alexa with Sonos speakers, taught Alexa to distinguish between two voices, and more. Because Alexa’s brain is in the AWS cloud, her new abilities are available to all Echo customers, not just those who buy a new device […] And it’s working — customers have purchased tens of millions of Alexa-enabled devices, given Echo devices over 100,000 5-star reviews, and active customers are up more than 5x since the same time last year. With thousands of developers and hardware makers building new Alexa skills and devices, the Alexa experience will continue to get even better.”

Shares of Amazon are up nearly 8% to $1,048.50 in after-hours trading Thursday. AMZN has a 1-year high of $1083.31 and a 1-year low of $710.10. The stock’s 50-day moving average is $976.74 and its 200-day moving average is $972.88.

On the ratings front, Amazon has been the subject of a number of recent research reports. In a report issued on October 24, Deutsche Bank analyst Lloyd Walmsley maintained a Buy rating on AMZN, with a price target of $1192, which implies an upside of 22% from current levels. Separately, on the same day, Cantor’s Martha Lepczyk maintained a Buy rating on the stock and has a price target of $1150.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Lloyd Walmsley and Martha Lepczyk have a yearly average return of 13.7% and 0.0% respectively. Walmsley has a success rate of 66% and is ranked #415 out of 4700 analysts, while Lepczyk has a success rate of 50% and is ranked #3330.

Sentiment on the street is mostly bullish on AMZN stock. Out of 32 analysts who cover the stock, 30 suggest a Buy rating and 2 recommend to Hold the stock. The 12-month average price target assigned to the stock is $1204.70, which represents a potential upside of 23% from where the stock is currently trading.