Yahoo Finance Results: Amazon.com, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Investors in Amazon.com, Inc. (NASDAQ:AMZN) had a good week, as its shares rose 6.4% to close at US$185 following the release of its first-quarter results. It looks like a credible result overall - although revenues of US$143b were in line with what the analysts predicted, Amazon.com surprised by delivering a statutory profit of US$0.98 per share, a notable 18% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Amazon.com after the latest results.
See our latest analysis for Amazon.com
Taking into account the latest results, the consensus forecast from Amazon.com's 56 analysts is for revenues of US$638.8b in 2024. This reflects a solid 8.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 23% to US$4.44. Before this earnings report, the analysts had been forecasting revenues of US$641.6b and earnings per share (EPS) of US$4.15 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$216, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Amazon.com, with the most bullish analyst valuing it at US$245 and the most bearish at US$180 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Amazon.com's past performance and to peers in the same industry. We would highlight that Amazon.com's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 17% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 10% annually. Factoring in the forecast slowdown in growth, it looks like Amazon.com is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Amazon.com's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$216, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Amazon.com analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of Amazon.com's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
