- Jeetil Patel - Deutsche Bank "We maintain BUY rating on shares of Amazon, as the fundamental growth (in metrics) remains solid, albeit affected by the strength in the US dollar and modestly by weak consumer spending. While FX headwinds and the current economic downturn have temporarily muted near-term growth and margin expansion, we expect unit growth in 2009 to power 19% operating profit dollar growth, which we think should lead to share price appreciation over the next 12-months." (Bold is mine)
- Justin Post - Merrill Lynch "Three positives for long term shareholders: 1) strong customer growth in 3Q at 17%, 2) midpoint of 4Q guidance implies a still solid ~20% ex-currency rev. growth in 4Q even in the heart of the recession, and 3) unit growth in 3Q was steady at 30%. Amazon's long-term share growth thesis across categories is on track, in our view. We do note that incremental margins in 4Q are expected at just 3.7% in our model, which is well below street long-term margin outlook (8-10%), so bears will argue Amazon is using lower margin sales to drive top-line. (Bold is mine)
- Scott Devitt - Stifel "Amazon reported 3Q08 revenue of $4.26 billion, an increase of 31%. Cash operating income was $231 million, up by 31%. Trailing twelve month free cash flow was $970 million, up by 21%. Amazon's domestic revenue growth rate was 29% and came in at 4x the industry. Amazon's international revenue growth rate was 33% or 28%, excluding currency. The company's quarter was solid in all respects and operating margin would have been better if not for the three capacity-driven domestic fulfillment center additions." (Bold is mine)
Thursday, October 23, 2008
Christmas is Still on at Amazon
Everybody knows I'm very bullish about Amazon and though they have adjusted their guidance for the 4th quarter, to account for the uncertainty, they are still growing in this economy.
Here is what the analysts are saying:
Just my 15%
While Amazon management adjusted 4th quarter guidance down, it was due mostly to the effect of the stronger US dollar and less to the current consumer spending malaise. While you wouldn't want to go out on a limb and buy up a lot of Amazon stock right now, if you sell product online, you will still want to be selling on Amazon this 4th quarter. Christmas will run as scheduled over at "The River".