Amazon.com, Inc. (AMZN, Financial) is about to forth its fourth quarter and full year earnings report on January 29, 2015. This could be the right time to buy the stock depending on the earnings report. Amazon.com, Inc. isn’t making money, but it doesn’t stop anyone from trading stock. The third quarter earnings report showed that stock price went down from $320 to $280. It was a critical situation for Amazon.com but it bounced back post it drop on October 23 to $340 and it is expected similar scenario which should be kept in account with $280 on the downside and $340 on the upside.
Amazon Reckoner
Amazon is an e-commerce company that sells a range of products and services through its various owned and affiliated Websites. The company’s products, offered through its consumer-facing websites, includes merchandise and content that the company purchase for resale from vendors and those offered by third-party sellers. Amazon also manufactures and sells electronic devices. The company offers services, such as Amazon Web Service (AWS), publishing, digital content subscriptions, advertising, and co-branded credit cards. The Company serves through the lowest prices possible on everyday product pricing and shipping offers, including membership in Amazon Prime. The company designs its websites to enable millions of products to be sold by the company and by third parties across various product categories, allowing access to its websites directly and through its mobile Websites, Kindle devices and apps.
Amazon.com received buy rating
As per the analyst Amazon.com has received the buy rating and $350 on the e-commerce giant ahead of its fourth-quarter results expected January 29. Shipping costs, which eat up 10 percent of revenue, should fall in the face of lower oil prices, while a "steady gain in market share" should prove soothing to investors. Further, the company's web services segment will face easier comparisons starting in the second quarter while the company will uncover cost "rationalizations" relative to China and other segments. Amazon shares are down more than 21% during the past year and this "dramatic under performance" helps creates an attractive investment for the investors. As per the analysis it is expected that Amazon will post fourth quarter earnings of $0.17 share, down from $0.51 a year earlier, whereas the revenue is expected to grow 16 percent to $29.73 billion.
Amazon stock started climbing after the eBay earnings
Shares of Amazon.com are climbing, up 4% to $309.15 in afternoon trading on Thursday, following the release of eBay's (EBAY, Financial) mixed fourth-quarter earnings report which included weak marketplaces revenue and gross merchandise volume. eBay reported its marketplaces revenue and GMV rose by a disappointing 1% and 2% year-over-year respectively in the fourth quarter, due to share loss to Amazon and other rivals. eBay has blamed its weak fourth quarter performance on SEO changes, a strong dollar, and a password reset requirement. There could be lots of thing to criticize about the Amazon.com; there is a specific segment where it keeps on beating eBay. There are few things which cannot be denied about regarding Amazon.com and eBay that is 3P (third-party) marketplaces, where Amazon is winning consistently. No doubt Amazon has grown faster than eBay in this segment. This is important, because the 3P marketplace is the most profitable of Amazon.com's segments, as well as eBay's could be most profitable in this segment, offering operating margins of around 50%. It's also no coincidence that Alibaba (BABA, Financial) is so profitable - it, too, is basically just a 3P marketplace. Amazon.com isn't profitable in overall terms, but that's not because of its 3P marketplace - it is in spite of it.
Amazon Stocks too soon to Buy
Due to this many fluctuations, the only bad news to report on this stock's performance over the last year is that it has tumbled by 27.52%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 955.55% compared to the year-earlier quarter. As we move towards the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative sign for Amazon; it could be one of the factors that may help make the stock more attractive down the road. Right now, however, we can believe that it is too soon to buy.
