3 reasons why Amazon (AMZN) may become the first trillion-dollar company

12:13 am ET, 27 Apr 2018

Upon releasing fantastic quarterly results, investors are wondering whether Amazon will become the first trillion-dollar company.

Amazon is increasing the price for Prime, as it saw strong gains from its retail segment. This is partly because of Whole Foods, which it acquired last year.

Retail sales increased 46% year-on-year to $30.7 billion this quarter.  Analysts forecasted that the retail segment in North America would have an operating income of $660 million in the quarter.

Now analysts think that the North American segment could see a surge in coming quarters from the Prime subscription service.

Another impressive figure: Amazon Web Services grew 49% to $5.4 billion.  This level of growth is astounding for a company that generates over $5 billion from infrastructure-as-a-service.

The cloud business had operating income of $1.4 billion in the quarter, representing a margin of 26%.  

The third reason why analysts are so ecstatic about Amazon is its burgeoning advertising business. Amazon wants to be #3 in the advertising space--and it's making some great investments towards this goal.  

Among the other notable results: Intel topped Wall Street's revenue expectations, which sent its own stock soaring.

Over the last year, AMZN returned +66.94%. This return is higher than Catalog & Mail Order Houses sector (43.27%), Services industry (10.93%), and S&P 500 (11.71%).

The check the latest news and stock analysis on Amazon, visit Finstead and type "AMZN news" or "AMZN buy or sell".  

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Netflix (NFLX): Has The Stock Peaked?

11:56 am ET, 11 Apr 2018

The Netflix stock (NASDAQ: NFLX) spiked around 4% today in mid-day trading. The stock witnessed a 60% year-to-date spike (visit Finstead and type “NFLX YTD return” to get the latest return).

What should you know about this stock?

The company’s exciting original content makes the stock more attractive.   Since Netflix is capable of delivering outstanding services in the competitive market, investors are getting more optimistic about sustaining growth.

Its resilience and the lack of dependency on trade agreements have made the stock even more appealing to investors.  Despite the prospect of a trade war between the US and China, the stock has remained unaffected.

Netflix outperformed its rivals such as Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) and Apple (NASDAQ: AAPL).

The growth is evident from the rising number of subscribers throughout the world. It is a cheaper substitute for TV.  Netflix consistently recorded a 6% average growth rate after hitting more than 100 Million paid subscribers in the second quarter of last year.

The Netflix stock surpassed previous quarter's EPS with a remarkable 650%  margin growth. The company recorded a 320% average year-over-year EPS growth since the fourth quarter of 2016, which is a sharp contrast to -15% margin decline from the third quarter of 2016. The margin expansion is a clear indication that the investment in expanding subscriber volume is paying off.

Can the stock sustain the momentum? Per Finstead Research, Netflix has the average price target of $266.

Netflix has a fairly high valuation compared to its peers. Its P/E ratio lags only that of AMZN.

The high Short Share of Float indicates potential volatility in the upcoming days.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Amazon.com (AMZN): Still Exposed To Government Pressure?

5:26 pm ET, 29 Mar 2018

When Axios reported President's Trump's intentions to check Amazon's compliance with the federal anti-trust law, its shares saw a dip of around 3% earlier today.  This caused a loss of around $50 billion in shareholders’ value. 

However, Sarah Huckabee Sanders said later today the Trump administration isn’t considering any changes in policy directed at Amazon. 

The altercation between Trump and the Amazon founder Jeff Bezos is likely to continue.  

President Trump is “obsessed” with regulating the e-commerce behemoth.

Bezos accused President Trump about faking charitable contributions.   He claims that Amazon is the leader in tax contributions in all states.  

As the company is building its second headquarters, estimated to cost $5 Billion, the promise is that Amazon will create 50,000 new jobs in the 20 selected locations.

It’s obvious that Amazon is a huge power force in the US economy, and it’s being increasingly scrutinized the Government. 

What are the chances for the stock price to increase?  And what is the price forecast?  

Per Finstead Research, the average target price is almost $1664. The stock has a 17% upside.  Note a wide spread between the minimum and maximum price target. 

The valuation of Amazon’s stock is the highest among its peers, based on forward P/E ratio alone.


Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Alphabet (GOOGL): Why Investors Think This Stock Is A Buy Now

4:08 pm ET, 26 Mar 2018

The similarity of Google’s and Facebook's business models, fueled by Facebook’s data leak, resulted in a dip for Alphabet’s stock price (NASDAQ: GOOGL) earlier last week. Both companies obtain the majority of their revenue from advertising. The impact is likely to continue until Facebook is completely cleared from the data leak scandal dating back three years.

Data is the driving factor behind IT companies such as Google, and cybersecurity breaches are at all-time high. The perceived lack of data integrity has affected investors’ sentiment about the advertising giants. 

However, the Facebook data breach is likely to be a temporary occurrence only.  Both Google and Facebook have a solid data governance model.  So now may be a good opportunity to buy these stocks at relatively low prices.

Google dominates mobile OS ecosystem.  More than 60% of the US and 80% of the global mobile OS market share is tied to Alphabet. 

Google’s core products are going strong.  Some core products and services that are doing well are YouTube, Gmail, Google Play, Pixel phones, and Google Cloud.

The Waymo subsidiary of Alphabet rules the autonomous vehicles sector. Waymo has also become one of the leading AI companies.

On the negative side, Google is facing tough competition from rivals like Amazon, particularly now that Amazon is gaining speed in the advertising space.  

Per Finstead Research, Google’s average price target is almost $1283.  Its price upside is 25% (just visit Finstead.com and type “Google price upside”).

Google has a fairly high valuation with respect to its peers. Its P/E ratio only lags that of YNDX and TWTR.


Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Shopify: Can The Stock Move Higher?

1:25 pm ET, 26 Mar 2018

There has been a 700% rise in Shopify’s stock (NYSE: SHOP) price since 2015.   But what is the stock price prediction?

Shopify's "Facebook problem"--its dependence on getting the data from the social networking site--had caused a dip in its stock price recently.

The Ottawa-based company enables smaller merchants to compete with huge retailers such as Amazon.com by providing them with tools and websites to run their operations.

Google inked a deal with Shopify to assist it in hosting its online e-commerce stores. The hosting will be done on Google's Infrastructure-as-a-Service.   This is a shrewd strategic move by the search engine giant in its attempt to compete with Amazon. 

A few other major retailers besides Shopify have switched from the rival’s Amazon Web Services to Google Public Cloud or Microsoft Azure.

Shopify's focus on the SMB segment, which is prone to headwinds in the retail sector makes it risky to buy the stock now.

Per Finstead Research , Shopify’s average price target is almost $145 which is comparable to its current price (visit Finstead.com and type "Shopify price target").  


Shopify’s valuation is the highest among its peers.

Our simple thought on Shopify is, hold for now.  It may be too risky to jump in at this point.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Square, Inc. (SQ): Should You Buy The Stock Now?

6:35 pm ET, 20 Mar 2018


A 6% rise in the stock price of Square (NYSE: SQ) caught investors' attention today. Square is trading at over $57 currently.

Square now has a $22B market cap. It’s very much driven by its prospect to become a leading payment solution for bitcoin payments. 

Optimists say Square's stock looks like Amazon’s in its early days.  This is because merchants are increasingly willing to accept bitcoin for store payments.

Square's price is now at its 52-week high.  The current price is almost 600%  higher than its 52-week low. 

However, the contrarians are saying this is purely a bubble. According to Finstead research, the consensus analyst price target is around $42, way below its current price.


Square’s valuation is the highest among its peers.

The Short Share of Float is higher than the average for the industry, so, a high volatility in the upcoming days can be expected.

One thing is certain: expect a lot of volatility in the upcoming weeks. 

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

FAANG Pullback Inevitable in 2018?

7:09 am ET, 02 Jan 2018

FAANG

As you're entering 2018, you may be wondering which stocks that you own in your portfolio are bound for a 'correction' in 2018.  

The scale of the FAANG rally in 2017  has led some investors to believe that this group has been overdone as an investing theme, especially given signs of overvaluation. 

Facebook, Amazon, and Netflix were up more than 50% over the last 12 months; Apple's gain was over 50%, and Google 'trailed behind' with 30%+ annual stock price growth.

And the FAANG stocks weren’t just market leaders this year; they accounted for a sizable portion of Wall Street’s overall move higher. 

How do the analysts feel about these stocks?  Morgan Stanley said it is still positive on the group, but macro factors could be concerning.  History indicates that returns may moderate their pace and Morgan Stanley analysts question whether growth can be sustained in the upcoming period.  

Apple investors should be especially worried about the $1,000 price tag on the iPhone X that may cut into first-quarter demand.

The group may be less well-insulated from cyclical pressures that many investors anticipate will increase over the next couple of years.  These stocks are tied to the cycle via advertising and consumer spending.

Here is a look-back on Facebook and Amazon stock performance.  Over the last year, FB returned +52.54%. This return is higher than Internet Information Providers sector (42.56%), Technology industry (26.77%), S&P 500 (18.87%) returns.

Over the last year, AMZN returned +52.98%. This return is higher than Catalog & Mail Order Houses sector (20.39%), Services industry (4.74%), S&P 500 (18.87%) returns.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

Amazon.com, Inc. (AMZN) Stock Guide

Updated at: 1:33 am ET, 12 Jul 2020

Before we start: if you're looking for AMZN stock price, you can quickly find it out by visiting Finny and typing "AMZN quote". If you're looking for a quick scoop on AMZN stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "AMZN". You'll get all this info in one place. Or you can just type "AMZN news" to get the latest stock news.

Looking to buy or sell Amazon.com, Inc. (AMZN)? Interested in getting the full scoop on AMZN, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this AMZN stock guide, we'll address key questions about AMZN, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are AMZN earnings?
2. When is AMZN earnings date?
3. What is AMZN stock forecast (i.e., prediction)?
4. AMZN buy or sell? What is AMZN Finny Score?
5. What are the reasons to buy AMZN? Why should I buy AMZN stock?
6. What are the reasons to sell AMZN? Why should I sell AMZN stock?
7. What are AMZN key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are AMZN earnings?

AMZN trailing 12-month earnings per share (EPS) is $20.94.

2. When is AMZN earnings date?

AMZN earnings date is July 23, 2020.

Analyst Predictions

3. What is AMZN stock forecast (i.e., prediction)?

Based on AMZN analyst price targets, AMZN stock forecast is $2,645.67 (for a year from now). That means the average analyst price target for AMZN stock is $2,645.67. The prediction is based on 47 analyst estimates.

The low price target for AMZN is $1,850.00, while the high price target is $3,000.00.

AMZN analyst rating is Buy.

Analysis

4. AMZN buy or sell? What is AMZN Finny Score?

#{finnyScore:38}Our quantitative analysis shows 3 reasons to buy and 5 reasons to sell AMZN, resulting in Finny Score of 38.

5. What are the reasons to buy AMZN? Why should I buy AMZN stock?

Here are the reasons to buy AMZN stock:

  • Amazon dominates North American online retail with an estimated gross merchandise value of over $300 billion. Product selection, great user experience, bargains and customer feedback have helped the company build a strong position for itself in the e-commerce market.
  • With more than half of the world's Internet users coming from developing markets, Amazon has promising international growth opportunities, including Europe, Japan, and India. Amazon has been introducing several new products for international markets, and expanding Prime to strengthen its foothold in international markets.
  • Amazon keeps its retail business very hard to beat on price, choice, and convenience with the help of a solid loyalty system represented by the Prime program. The company continues to push advantages exclusively to Prime members, thus encouraging them to spend more on Amazon.
  • Amazon’s strategy of gradually merging online and offline retail looks promising. It will not only reshape the retail landscape but also help it fend off competition. It has added online and offline features to its bookstores and is going the same way with innovations such as drive-in-grocery delivery service (AmazonFresh Pickup - order groceries online and collect them from a store nearby) and “cashier-less” stores (Amazon Go – the company’s first brick-and mortar grocery store).
  • Amazon is the leading provider of cloud infrastructure as a service to enterprise customers. The Amazon Web Services (AWS) business is growing at over 40% year over year. Even more encouraging is the fact that AWS generates much stronger margins than the traditional retail business, which should remain a positive for the company’s profitability as AWS continues to grow in the mix.
  • Alexa powered Echo devices are going great guns and help the Company sell products and services. Artificial intelligence (AI) driven Alexa has already been integrated into a host of everyday devices for the digital home, which has converted the nascent smart home market into a potential area of growth in a very short time. Alexa is equipped with tens of thousands of skills and can connect to any stream of business.
  • Alexa is an important method for Amazon to collect householder information, since it is used to listen to commands and store everything that it hears in the cloud. Amazon is racing to build an ecosystem around Alexa; it has taken an early lead over Google's smart assistant and Microsoft's Cortana.
  • Amazon is buying companies in markets where it doesn't dominate. In 2017 it acquired a Dubai-based ecommerce giant, Souq.com, which helped establish its presence in countries such as Egypt, Saudi Arabia, and the UAE.
  • Trough the acquisition of natural and organic foods supermarket Whole Foods, Amazon is targeting a considerably large customer base that still prefers to shop at physical stores. This is how Amazon is tacking competition and slow growth in the e-commerce space.
  • Amazon generates strong cash flows. Despite the seasonality in its business and the resultant fluctuation in gross margins, operating margins do not move around that much. This is because of a relatively flexible operating cost structure, which allows the Company to curtail technology and content expenses in particular when margins are impacted by discounts and promotions (e.g., during the holiday season).
  • AMZN quarterly revenue growth was 26.40%, higher than the industry and sector average revenue growth (1.17% and 1.35%, respectively). See AMZN revenue growth chart.
  • AMZN average analyst rating is Buy. See AMZN analyst rating chart.
  • AMZN cash to debt ratio is 0.63, higher than the average industry (0.16) and sector (0.14) cash to debt ratio. See AMZN cash to debt chart.

6. What are the reasons to sell AMZN? Why should I sell AMZN stock?

Let's look at the reasons to sell AMZN stock (i.e., the bear case):

  • Amazon's margin expansion trajectory is likely to be uneven at times, given its global logistics and content investments, new sources of competition, and physical store aspirations.
  • Amazon Web Services faces competition from well-capitalized peers like Microsoft Azure and Google Public Cloud, potentially exposing it to more aggressive price competition and longer-term margin pressures.
  • The competition in online retail is heating up. Traditional retailers have always provided the strongest competition and a number of them are running e-commerce sites as well. Additionally, the increased use of the Internet in both developed and developing economies is attracting other players into the space.
  • Prime’s saturation in the U.S. market is apparent, because Amazon has very high penetration rates in the country. This led management to announce a tiered pricing system, wherein users can try out a monthly subscription if they are unsure about the program or don’t want to pay upfront for the whole year.
  • Most retail businesses tend to be seasonal and Amazon’s is no different. The company’s revenues get a huge boost from the holiday season each year (over 34%). With such a huge contribution from the fourth quarter, there is an obvious drop-off in the first quarter. The dependence on consumer spending makes the business lumpy, increasing the possibility of expectations going awry.
  • AMZN stock price ($3200.00) is at the 52-week high. Perhaps now is a good time to sell? See AMZN price chart.
  • AMZN forward P/E ratio is 62.50, which is high compared to its industry peers’ P/E ratios. See AMZN forward P/E ratio chart.
  • AMZN Price/Book ratio is 18.26, which is high compared to its industry peers’ P/B ratios. See AMZN forward Price/Book ratio chart.
  • AMZN average analyst price target ($2645.67) is below its current price ($3200.00). See AMZN price target chart.
  • AMZN Enterprise Value/EBITDA multiple is 33.52, which is high compared to its industry peers’ Enterprise Value/EBITDA ratios. See AMZN Enterprise Value/EBITDA chart.

Key Stats

7. What are AMZN key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for AMZN:

Metrics AMZN
Price $3,137.00
Average Price Target / Upside $2,645.67 / -15.66%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Specialty Retail
Sector Consumer Cyclical
Number of Employees 647,500
Market Cap $1,191.5B
Forward P/E Ratio 62.50
Price/Book Ratio 4.02
Revenue (TTM) $296.27B
YoY Quarterly Revenue Growth 26.40%
Profit Margin 3.56%

If you liked this analysis, check out Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

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