logologologologo
  • Home
  • Business
  • Markets
  • Exchange
  • Investment
  • Personal Finance

Should You Buy Amazon Before the First-Quarter Earnings Report?

The e-commerce giant has a habit of beating revenue forecasts.

Amazon (NASDAQ:AMZN) stock has been a great investment over the past 10 years, notching a price gain of 1,652%. The e-commerce giant had an amazing 2020, filling orders for millions of new Prime members (as well as the millions of existing ones), making inroads into its many new business segments as it managed during the coronavirus pandemic, and generating more than $386 billion in revenue (up 37.7% from 2019).

As 2021 marks a turning point in the pandemic and more people get vaccinated and again venture out into the community, will this return to normalcy dent Amazon’s next earnings report (scheduled for release Thursday)? Or should you bet on more of the same and buy shares now, before the fiscal 2021 Q1 release?

Building on its past successes

Amazon has built itself up from a not-so-simple bookseller to become not only the top e-commerce company in the world, but the second-largest U.S. company as measured by revenue, only topped by rival retailer Walmart.

IMAGE SOURCE: GETTY IMAGES.

For the first quarter of 2021, Amazon is projecting sales growth of 33% to 40%, suggesting confidence that sales are not slowing down at all.

The company doesn’t regularly report Prime subscriber growth, but in his last letter to shareholders released last week, outgoing CEO Jeff Bezos said that it now exceeds 200 million. That’s a 33% jump from the 150 million reported in January 2020. As for his departure, Bezos said “Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

The king of disruptors

Amazon is good at many things, and one of those is pushing into new territory. Along with retail, Amazon Web Services (AWS) is dominating cloud computing, the company is a player in streaming video and audio markets, and it has been a pioneer in AI devices for the home.

AWS now accounts for about 11% of total sales, but more than half of net income. It’s also continuously adding new cloud service accounts from companies large and small, including JPMorgan Chase and MercadoLibre.

Amazon is also making important strides in its foray into the grocery market, opening 12 Amazon Fresh stores in 2020 in addition to its Go cashierless stores.  With new launches becoming par for the course, it’s hard to imagine Amazon not continuing to post double-digit percentage sales increases for a long time.

Accelerated digital adoption

Even with the success of vaccine rollouts in the U.S., there are reasons to be confident that e-commerce can continue to be a growth driver for the company. Shoppers still rely on e-commerce and, despite a return to retail normalcy, many customers have come to rely on digital shopping and are making the change permanent. 

A McKinsey report found that more people are spending online, and more people plan to continue that trend after the pandemic ends. Its top categories moving online were over-the-counter medicines and grocery, two areas where Amazon has made a big push recently.

Amazon’s stock price jumped 74% just in 2020 and is up a relatively tame 4.9% so far in 2021. If earnings beat expectations, as they did for the past three quarters, that’s likely to break the jam and cause some upward price movement. Long term, the company still has a lot of potential, making now a great time to buy.This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and MercadoLibre. The Motley Fool recommends the following options: long January 2022 $1920.0 calls on Amazon and short January 2022 $1940.0 calls on Amazon. The Motley Fool has a disclosure policy.

Related posts

February 3, 2023

Where Will AMD Stock Be In 1 Year?


Read more

Categories

  • Business
  • Content
  • Exchange
  • Inflation
  • Investment
  • Markets
  • Personal Finance
  • Technology
  • Uncategorized

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021

Recent Posts

  • Where Will AMD Stock Be In 1 Year?
  • Here’s how — and where — Netflix has started cracking down on password sharing
  • 2 reasons Meta stock is exploding 20% after a whopper earnings miss
  • Apple earnings: What to expect from the iPhone maker
  • Bitcoin closes out best January since 2013

About Us

The Alpha Cut a Vida Street LLC Company
1404 N. Ronald Reagan Blvd.
Suite 1120
Longwood, FL 32750

Link

(843) 256-4375
https://thealphacut.com

Why Us

Terms & Privacy
Policy & Procedure
Disclaimer

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only.
Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
All data in this communication is provided for informational purposes only and is not intended for trading or investing purposes. We expressly disclaim the accuracy, adequacy, or completeness of any data and content provided by financial exchanges, individual issuers, their respective affiliates and business partners and shall not be liable for any errors, omissions or other defects in, delays or interruptions in such data, or for any actions taken in reliance thereon. You agree not to copy, modify, reformat, download, store, reproduce, reprocess, transmit or redistribute any data or information found herein or use any such data or information in a commercial enterprise without obtaining our prior written consent.
We make no express or implied warranties or representations and shall have no liability whatsoever with respect to any data contained herein. The data may not be further redistributed or used to create indices or other financial products. This report and the views expressed herein are subject to change at any time based upon market or other conditions (such as domestic and global economic trends) and are current as of the date of publication hereof. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
We emphasize that Investment in the securities of smaller companies can involve greater risk than is generally associated with investment in larger, more established companies, and can result in significant capital losses that may have a detrimental effect on the value of your investments.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth.As with any structuring of a portfolio of investments, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general, impersonal information only and are not intended to provide specific advice or recommendations for any individual entity.

copyright © Alpha Cut 2021. All Right Reserved
The Alpha Cut a Vida Street LLC Company