Amazon.com, Inc.

 

AMZN Details
 
Decent Net Sales Guidance for Q4FY19: Amazon.com, Inc. (NASDAQ: AMZN) provides physical, e-commerce, and omnichannel retail and other services to businesses through commercial agreements, strategic alliances, and business relationships. The company’s offerings include web services, technology, fulfillment, computing, digital storage, and other services, as well as enable sellers to offer products or services through the stores. 
 
Q3FY19 Highlights for the period ended 30 September 2019:AMZN reported its FY19 third-quarter results, wherein the company reported net sales of $69,981 million as compared to $56,576 million in the previous corresponding period. The company reported net income at $2,134 million as compared to $2,883 million in Q3FY18. During the quarter, the company introduced more than 20 new Fire TV products, namely Fire TV Edition soundbar, Fire TV Cube, OLED Fire TV Edition smart TV, the Fire TV Edition smart TV with far-field Alexa voice control, etc. AMZN expanded its content line-up for Fire TV customers, which includes YouTube TV app, Apple TV app, free News app. During the third quarter, Fire TV announced more than 37 million active users worldwide and continues to hold its leading position across streaming media player segment across the U.S., the U.K., Germany, Japan, and India. The company informed that it has collaborated with General Motors (NYSE: GM) to integrate Alexa into millions of vehicles across GM’s four brands, namely Chevrolet, Buick, GMC, and Cadillac. During the quarter, AmazonFresh expanded to new markets like Indianapolis, Houston, Minneapolis, and Phoenix.
 
Segment-Wise Performance:Net sales from the North America segment came in at $42,638 million, up ~24% on pcp. North America contributed to ~61% of the total revenue.During the quarter, the international and amazon web services (AWS) segments reported an income of $18,348 million and $8,995 million, depicting a growth of 18% and 35%, respectively on pcp terms. International and AWS represented ~26% and ~13% of the total revenue, respectively.

Q3FY19 Financial Highlights (Source: Company Reports)
 
Guidance:As per the Q4FY19 guidance, AMZN expects net sales between $80.0 billion to $86.5 billion, representing growth in the range of 11% and 20% on y-o-y basis. This guidance takes into account an unfavorable impact of approximately 80 basis points from foreign exchange rates. Operating income is expected to be between $1.2 billion - $2.9 billion as compared to $3.8 billion in Q4FY18.

 Stock Recommendation:The stock of AMZN is quoting at $1752.79, with a market capitalization of ~$869.03 billion. The stock has generated returns of -5.64% and 15.90% in the last six-months and one-year, respectively. During Q3FY19, the business has delivered operating margin and net margin of 4.5% and 3.1%, higher than the industry median of 1.9% and 0.4%, respectively. ROE of the business stands at 3.9%, higher than the industry median of 1.5%. The business expects lower double-digit growth in Q4FY19 revenues. The company states that Alexa has the capability of operating more than 85,000 smart home products from over 9,500 unique brands. AMZN has upgraded its product Alexa with several smart home features and products, which help customers find hassle-free smart home products that are simple to set up and use. Considering the performance in the third quarter, decent net sales guidance for the upcoming quarter, higher profitability ratios in comparison to the industry, price movement and current trading levels, we recommend a ‘Hold’ rating on the stock at the current market price of $1752.79, up 0.01% as on 19 November 2019.

 
 
 AMZN Daily Technical Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.