Amazon.com, Inc. (NASDAQ:AMZN) investors sent shares vaulting 13% on Friday after the online auction and e-commerce leader handily trounced expectations across the board in its first quarter having acquired Whole Foods.
GBH Insights analyst Daniel Ives is out declaring from a bullish platform that any Whole Foods-tinted apprehensions circling margin performance or outlook have been revealed in the light of day to be specters at most. Some investors also had eyes on the company’s meaningful short-term investment picture between Amazon Web Services (AWS), fulfillment initiatives, international gains, among assorted fresh growth initiatives, writes Ives. In fact, with an EBITDA outclass in tow and a fourth quarter guide that likewise was more impressive than anticipated, all worries should be calmed in the short-term.
Commending the e-commerce king’s core retail strength and prime growth for what landed a “Picasso-like quarter” in stellar earnings, the analyst reiterates a Highly Attractive rating on AMZN stock with a valuation target of $1,185, which implies a close to 8% upside from where the shares last closed. (To watch Ives’ track record, click here)
Between retail and AWS, the analyst underscores “the major fuel in the engine for Amazon yet again this quarter,” attributing these segments as the reason for the outperformance against the Street, bringing roughly 30% organic growth to the table. Notably, this marks “an acceleration of growth despite any lingering distractions from the Whole Foods integration with the deal closing in late August,” asserts Ives, continuing: “Importantly, AWS also beat expectations in 3Q as the secular shift to cloud among enterprises is disproportionably benefiting Amazon as well as its Seattle brethren Microsoft in the field as evidenced again this quarter.”
Overall, the analyst concludes on a confident note for the company that reigns the top of the e-commerce leaderboard: “We also believe potentially aggressively betting on other consumer areas such as healthcare with the pharmacy segment front and center is a smart strategic bet as Amazon looks to further spread its tentacles across the consumer landscape globally. In sum, last night’s quarter, underlying retail strength, smooth signs around the Whole Foods acquisition, AWS momentum, and a healthy outlook heading into holiday season is another feather in Bezos cap that should be bullish for shares this morning.”
Ives is not the only voice on the Street enthusiastic on Amazon’s prospects, considering TipRanks analytics exhibit AMZN as a Strong Buy. Based on 34 analysts polled by TipRanks in the last 3 months, 33 rate a Buy on Amazon stock while 1 maintains a Hold. The 12-month average price target stands at $1,235.20, marking a 12% upside from where the stock is currently trading.