Last week, earnings season kicked off in earnest for the Big Tech brigade, a trend that will continue this week. More of the Street’s big hitters will be lining up to dial in their latest quarterly readouts, and Amazon (NASDAQ:AMZN) will be amongst them.
The tech giant will post its Q1 results on Tuesday after the market closes and looking ahead to the print, Benchmark analyst Daniel Kurnos thinks “sentiment remains positive.”
This optimism stems from recent announcements and rumors, including: “1) Over 200 million monthly viewer reach with the ad-supported Prime Video product; and 2) The announcement of a grocery subscription service which, we suspect, will have substantial adoption within the Prime user community; and 3) Ramping speculation that Amazon will be the third NBA TV partner.”
Furthermore, CEO Andy Jassy’s recent letter to shareholders highlighted the positive developments within AWS, while additional cost efficiencies and speed improvements for the ecommerce platform are on the way.
That said, not everything at Amazon has been “rainbows and sunshine.” Kurnos notes that per Nielson, its North American streaming share has declined by 1% on a year-over-year basis. Meanwhile, several media reports have raised concerns about issues related to purchasing or accessing standalone Prime Video globally, suggesting potential upcoming changes or possible bugs in the system (similar concerns were noted during the initial rollout of the ad-supported platform). A shift towards lower-priced options could also impact gross merchandise value (GMV) and average order value (AOV), although despite heightened competition, Kurnos thinks Amazon is still expanding its market share.
All in, Kurnos takes a positive stance, balanced by the need for a differentiating catalyst for a strong post-earnings rally to take place. “We think there is enough here to keep investors excited over the near-term on what should be another solid print, although we suspect something like a more meaningful AWS acceleration might be needed to drive another breakout higher,” he summed up.
To this end, Kurnos rates AMZN shares a Buy, alongside a $200 price target, implying shares have room for 11% growth over the coming months. (To watch Kurnos’s track record, click here)
AMZN is that rare beast – a stock with plenty of coverage where everyone is in agreement. It has garnered 42 analyst reviews over the past 3 months – all Buys – naturally making the consensus view here a Strong Buy. The average price target stands at $213.74, suggesting the shares will climb 19% higher over the one-year timeframe. (See Amazon stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
