Amazon.com, Inc. (AMZN) Keeps Investing to Support Business Growth, GoPro Inc’s (GPRO) Long-Term Market Opportunity Remains Unclear


All Eyes on Amazon Q1 Earnings 

Amazon.com, Inc. (NASDAQ:AMZN) reported first quarter revenue and operating income above Street expectations. However, guidance came in below expectations on unfavorable FX and continuing investment in India, fulfillment, digital content, and AWS.

Jefferies’ top analyst Brian Fitzgerald believes that AMZN remains a core eCommerce holding with plenty of growth opportunities ahead. As such, the analyst raises his price target to $1,150 (from $975), while reiterating a Buy rating on the stock.

Fitzgerald stated, “Our long-standing thesis is still intact as AMZN continues investing in the assets (fulfillment, digital content, AWS) that reinforce its competitive moats. Here are the reasons why we think investors should still be buying the stock: 1) AMZN is best positioned to benefit from the secular shift of commerce from offline to online (from ~10% penetration today to 25%-30% longer term) and the Co continues gaining market share by reducing friction for shoppers (offering better selection, product availability and higher service levels); 2) AMZN’s ability to get purchases to consumers fast is a huge differentiator that drives growth in existing and new categories; 3) the global AWS opportunity is a revenue growth engine with corresponding margin accretion to the overall business; 4) international opportunities (India, China and other untapped geographies) carry huge potential for AMZN.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Fitzgerald has a yearly average return of 18.4% and a 81% success rate. Fitzgerald has a 21.1% average return when recommending AMZN, and is ranked #23 out of 4571 analysts.

Amazon shares are currently trading at $924.78, up $6.40 or 0.70%.

GoPro’s Drones Are Taking off but Skepticism Remains

In a research note issued today, Oppenheimer analyst Andrew Uerkwitz reiterated a Perform rating on shares of GoPro Inc (NASDAQ:GPRO), after the struggling wearable-camera maker reported better-than-expected first quarter results, with revenue beating the upper range of guidance.

Uerkwitz noted, “Mgmt indicated in the $1,000+ drone category, Karma was the second-best seller, garnering an impressive 19% share. We believe best sellers remain below this mark. It’s solid progress in light of previous quarters’ setbacks. We maintain the view that Karma is more of an accessory than a true drone (but material nonetheless).”

The analyst continued, “We no longer remain critical of strategy or direction. Both hardware and software are strong. We remain sidelined for now, still skeptical of the long-term market opportunity. Hence, we keep our numbers conservative, but adjust them for recent results/guidance. Our current view is even with perfect execution, returning to former glory (and $1.32 in EPS) may prove impossible.”

As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. According to TipRanks, analyst Andrew Uerkwitz has a yearly average return of 6.5% and a 56% success rate. Uerkwitz has a 9.6% average return when recommending GPRO, and is ranked #724 out of 4571 analysts.

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