Amazon.com on Sale after Shortfall

Amazon.com, Inc. (NASDAQ:AMZN) got slammed after reporting a shortfall in its fourth-quarter sales and offering a below-consensus first-quarter sales guidance.

buz Investors  Retail Disrupter Amazon.com, Inc. (NASDAQ:AMZN) got slammed after reporting a shortfall in its fourth-quarter sales and offering a below-consensus first-quarter sales guidance.

While the sales concerns are justified, especially given that AMZN stock has risen 58% over the past 52 weeks, I view major share price weakness as an opportunity.

AMZN stock trades at 55 times its 2017 earnings per share (EPS) and 22 times its book value, both indicating that major growth is discounted into the share price, so it should not be a surprise that the stock lost some ground. In reality, many traders probably hoped for a bigger decline than the 3.5% move.



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Retail Disrupter

Wal-Mart’s move could force Amazon.com to tinker with its pricing strategy, but the reality is that Amazon has a big advantage in that its shoppers have access to hundreds of thousands of retailers from around the world.

In 2016, Amazon.com reported that it had delivered over two billion units for sellers while the number of active sellers surged in excess of 70%. In all, sales were shipped to shoppers in 185 countries from sellers in over 130 countries. (Source: “Amazon.com Announces Fourth Quarter Sales up 22% to $43.7 Billion,” Amazon.com, Inc., February 2, 2017. )

In addition, AMZN stock will benefit from the growing adoption of the company’s “Amazon Web Services” (AWS) cloud business that witnessed year-over-year growth of 47%, to $3.5 billion in 2016.

A look at the yearly chart of Amazon stock shows the impressive upward trend that has been firmly in place since 2009.
Tech Stocks ( GOOG)   (MSFT ) ( AAPL ) (BBRY ) ( gopro )  ( WDC )




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Jadtecnic

Richard Dambrosi (JADTECNIC) Has Been Sharing FOREX INVESTORS ANALYSIS FORECAST since 2011. Editors and Founder of InvestorsBuz.com, has a passion for Forex Social Sharing analysis and Market Trends Such as Self Driving Cars, Electric Cars, Medical Marijuana, 3d printing and Cloud computing, Refers to Readers as BUZ INVESTORS.

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