Amazon's Growth Logic Vs Stock Price
Wall Street rarely sees a high degree of agreement, but Amazon is an exception. The Bank of America report on August 10 pointed out that all 55 fund managers interviewed recommended buying the stock.
On the disk, there is a completely different picture. Since Amazon peaked in June, its market value has evaporated by about 15%, which is equivalent to US$267 billion.
Amazon's revenue in the second quarter was US$113 billion, which was lower than the average analyst estimate of US$115 billion. The company's chief financial officer Brian Olsavsky said that revenue growth in the next few quarters will not be too high.
Among the trillion-dollar companies in the United States, Apple, Microsoft, and Google’s parent company Alphabet all set record highs this week, while Facebook is less than 5% from the historical high.
Can you buy the bottom?
Bezos announced his resignation on July 5th, happily running around in space. At the same time, Amazon's stock price fell from the sky.
Last year, under the influence of the epidemic, people turned to online shopping. Amazon's revenue soared by 43.6% year-on-year, and the company's logistics were once overloaded.
Chris Verrone, a partner at Strategas Research Partners, a research firm, said that from a technical perspective, Amazon has not entered the oversold area.
Recently, the "Wall Street Journal" broke the news that Amazon plans to open several large physical retail stores in the United States, but this news is obviously not enough to reverse the stock decline.
Of course, many market participants see it as an opportunity for bargaining. Even if performance growth slows down from last year's level, analysts still believe that e-commerce and cloud computing have long-term benefits.
Dan Forman, executive director of MKM Partners, pointed out that Amazon has digested its worries about the growth rate, and the year-on-year value will return to normal after the fourth quarter.
From the perspective of EV/EBITDA, Amazon has discounts relative to the 1-, 2-, and 5-year averages, which is critical to me. I think it is likely to stabilize at the current water level.